Saudi developer clinches $3.7bn green loan for The Red Sea Project
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The financing is the first riyal-denominated credit facility to receive green financing accreditation
by Zainab Mansoor
April 27, 2021
The Red Sea Development Company (TRSDC), Saudi-based developer has closed a SAR14.12bn ($3.76bn) term loan facility and revolving credit facility with four Saudi banks, it announced today.
The financing is the first riyal-denominated credit facility to receive green financing accreditation. Banque Saudi Fransi, Riyad Bank, Saudi British Bank and Saudi National Bank acted as mandated lead arrangers, while HSBC served as green loan coordinator on the transaction.
Four leading Saudi banks participate in first riyal-denominated green financing The Red Sea project is aiming for a complete transformation of an hitherto undeveloped location in the Kingdom. Image Credit: Supplied
Dubai: A Saudi tourism project has secured one of the biggest ‘green’ financing to date – at a whopping 14.12 billion ($3.76 billion).
The Red Sea Development Co. (TRSDC) will use these funds to part-finance its project – one of the Kingdom’s biggest tourism-focussed projects. Green financing is given to those projects that are built with social and environmental sustainability frameworks.
In fact, this is the first Saudi riyal-denominated credit facility to receive a green financing accreditation. The funding is structured as a term loan and revolving credit facility from four Saudi banks - Banque Saudi Fransi, Riyad Bank, Saudi British Bank and Saudi National Bank.
5 hours ago
The Red Sea Development Company (TRSDC) has closed a SAR14.1 billion (US$3.8 billion) term loan and revolving credit facility with four Saudi banks.
Banque Saudi Fransi, Riyad Bank, Saudi British Bank and Saudi National Bank acted as mandated lead arrangers.
HSBC served as green loan coordinator on the transaction.
The financing is the first Riyal-denominated credit facility to receive Green Financing accreditation.
“The scale of this project is unmatched anywhere in the world and we are setting new standards in regenerative tourism at every turn.
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“By applying a unique approach to design, utilising more sustainable methods of construction and using ground-breaking technology, we are not only reducing our impact on the environment but helping to deliver on our commitment to achieve a 30 per cent net conservation benefit by 2040.
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What is sustainable finance?
While there is no agreed upon definition or harmonized measurement of sustainable finance, the Expert Panel on Sustainable Finance has summarized the concept as “capital flows (as reflected in lending and investment), risk management (such as insurance and risk assessment), and financial processes (including disclosure, valuation and oversight) that assimilate environmental and social factors as a means of promoting sustainable economic growth and the long-term stability of the financial system.”
3 More generally, sustainable finance is the process of integrating ESG criteria when making decisions in the financial sector and business decisions for the benefit of stakeholders and society. The ultimate goal is to transition to a more sustainable and lower-carbon economy, which is increasingly viewed as critical to the long-term success of businesses, economies and society.