LATER THIS MONTH contractors and investment bankers will assemble in Jeddah for a detailed briefing on Saudi Arabia’s multi-million project to establish a rail link between Mecca and Medina.
This is only the latest of several big projects – estimated by bankers to be worth at least $200 billion over the next 20 years – that have been announced by the government, to be undertaken by combinations of the public and private sectors.
These include another rail project – the Landbridge between the west and east coasts of Saudi Arabia – as well as water, electricity and petrochemicals projects. Even more ambitious are the plans for the SR100 billion ($30 billion) King Abdullah Economic City, which will be built north of Jeddah and financed entirely by the private sector.
Riyadh’s financial community is eagerly waiting to hear the terms for the financing of the independent water and power project (IWPP) at Marafiq, where bids have just been submitted, with financing underwritten.
This is expected to be a much more tightly priced deal than that agreed for the ground-breaking $2.5 billion Shuaibah 3 IWPP deal negotiated early this year – a transaction that boosted confidence in the kingdom and among international bankers that this level of investment could be carried out by project finance.