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Mon 28 Mar 2016 11:07 AM

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Korea-led consortium signs $20bn Saudi housing deal

100,000 new homes are to be built in Saudi Arabia under landmark agreement

Korea-led consortium signs $20bn Saudi housing deal
Hanwha E&C president Choi Kwang-ho (fifth from right), Daewoo E&C president Park Young-shik (fourth from left) and Saudi Housing Minister Majed al-Hogail (center) pose during a memorandum of understanding signing ceremony to build 100,000 homes in Saudi Arabia in a Seoul hotel. Hanwha E&C New Growth Strategy Team Leader Kim Dong-sun (fourth from right), the third son of Hanwha Group chairman Kim Seung-youn, also attended the event. (Hanwha E&C)

A consortium including Korean group Hanwha Engineering & Construction has inked a $20 billion deal to build 100,000 homes in Saudi Arabia, according to local media.

The development will reportedly represent the largest ever project that a Korean builder has clinched from a foreign country, Hanwha said in a statement.

The consortium, which also includes Korea’s Daewoo Engineering & Construction and Saudi construction firm Saudi Pan Kingdom for Trading, Industry & Contracting (Sapac) signed a memorandum of understanding (MoU) with Saudi Arabia’s Ministry of Housing to build the new city development project close to Riyadh International Airport.

The MoU signing took place in Seoul, reported English language daily Korea Herald.

A Hanwha spokesman said: “We will supply 100,000 houses and city infrastructure in Alfursan near the Riyadh International Airport and this will be a landmark deal for Korea’s overseas construction history in terms of the size.”

The spokesman added: “It is too early to tell the details of the deal, but the consortium expects to push for the mega project with a stable financing source, backed by the Saudi government.

“The company has sought the deal, which will be helpful to cement its reputation as a global city developer in the Middle East, following the ongoing Bismayah new city project in Iraq,”

Hanwha is helping to build one of Iraq’s biggest new developments in recent years – the Bismayah city project 10km southeast of Baghdad on the Iraqi-Kuwaiti Highway.

The project is spread over 1,830 hectares and is planned to accommodate 600,000 occupants in around 100,000 residential units.

The Saudi Ministry estimated last year that the kingdom’s lack of housing infrastructure would require three million new homes by 2025, based on projected growth of the population.

Parent company Hanwha Life reported in February that it had reached a new milestone of $82.2 billion in total assets. It said the company is on course to exceed $164.4 billion of assets by 2024.

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