Saudi Arabia's Jeddah Economic Co said on Monday it was in talks with local Saudi banks to raise funds for the SAR14bn ($3.73bn) first phase of its Kingdom City project.
If completed, the project's over one kilometre tall Kingdom Tower will replace Dubai's Burj Khalifa, 828 metres tall, as the highest in the world.
Kingdom City in Jeddah will also include mixed-use residential and commercial developments, the chief executive of the Jeddah Economic Co said at a construction conference in Dubai.
"The financial requirement is for SAR14bn to complete phase one by 2020," Mounib Hammoud, said at the side lines of the conference.
"Our owners have already invested about SAR8.7bn into this project, which is a huge investment. The remaining will be financed and we are closing a financing deal with banks which will be announced soon."
He added that the funding would be through local Saudi banks but did not reveal how much will be raised.
Hammoud said some funds for the project would also come from sale of land plots to other investors.
The first phase of the project is over an area of 1.4 million square metres, centered around the Kingdom Tower. The tower is expected to be completed by 2018 and will cost the company SAR6bn, Hammoud said. Dubai's Burj Khalifa was built by Emaar Properties for a total cost of $1.5bn.
"We will hand over the tower with 251 floors completed by 2018."
Jeddah Economic Co., is 16.63 percent owned by the Saudi Bin Laden Group, while Kingdom Holding holds a 33.35 percent stake in the venture. Abrar International Holding Co. also has a 33.35 percent stake while businessman Abdurrahman Sharbatly will own 16.67 percent.
Hammoud said the next phases of the project would be driven largely by market demand.
BNP Paribas is advising the company on its finances, he said, adding that the company is also looking at raising finance through the bond markets.
"We are looking at the bonds and sukuk market but this will need a structure in place, which we are working on."For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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