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Red Sea Global Awards $266 Mn Contract in Saudi Arabia

Triple Bay masterplan of the Red Sea Global (Asharq Al-Awsat)
Triple Bay masterplan of the Red Sea Global (Asharq Al-Awsat)
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Red Sea Global Awards $266 Mn Contract in Saudi Arabia

Triple Bay masterplan of the Red Sea Global (Asharq Al-Awsat)
Triple Bay masterplan of the Red Sea Global (Asharq Al-Awsat)

The Saudi Red Sea Global awarded a Primary Infrastructure and Utility Contract of $266 million to the al-Ayuni Investment and Contracting to progress expansion at Amaala’s first phase of development across its Triple Bay masterplan.

Red Sea Global is developing The Red Sea and Amaala destinations in the Kingdom.

Al-Ayuni, classified as a “First Class” contractor in the Kingdom since 2006, will deliver state-of-the-art Primary Utility Infrastructure Systems while minimizing Triple Bay’s carbon footprint as part of Amaala’s commitment towards net-zero operations.

The CEO of Red Sea Group, John Pagano, said the deal forms a critical part of Red Sea Global’s ambition to pioneer a new relationship between luxury tourism and the natural environment.

“The sheer scale of the developments and our relentless pursuit of regenerative tourism requires meaningful partnerships that can deliver resilient infrastructure,” said Pagano.

He asserted that cooperation with al-Ayuni can collectively shape future developments in the Kingdom.

Al-Ayuni was selected based on its technical and commercial competencies and regional and global credentials.

All design and construction methods meet Red Sea Group’s stringent criteria for end-to-end sustainable development, including economic, financial, social, and institutional factors.

Al-Ayuni’s Chairman Faheed al-Ayuni indicated that Red Sea Global is a future-forward developer closely aligned with the company’s legacy of innovating world-class solutions, cementing trusted relationships, and setting new benchmarks.

Al-Ayuni asserted it was an “honor for us to contribute to its pioneering destinations, and we look forward to unlocking the full breadth of our robust capabilities to meet RSG’s ambitious sustainability targets.”

Amaala’s first phase of development, focused on the Triple Bay masterplan, will encompass eight hotels and upwards of 1,200 hotel keys upon full completion in 2027.

The destination will offer 3,000 hotel rooms across 25 hotels, high-end retail establishments, fine dining, wellness, and recreational facilities.

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S&P Expects Saudi Issuances to Continue Domestically, Internationally Driven by Vision 2030

A view of the Saudi capital, Riyadh. (SPA)
A view of the Saudi capital, Riyadh. (SPA)
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S&P Expects Saudi Issuances to Continue Domestically, Internationally Driven by Vision 2030

A view of the Saudi capital, Riyadh. (SPA)
A view of the Saudi capital, Riyadh. (SPA)

S&P Global Ratings anticipates that Saudi issuers will continue to tap local and international capital markets to finance projects under Saudi Arabia’s Vision 2030. The agency expects debt levels to remain manageable, with private sector debt-to-GDP ratios staying below 100% over the next 12 to 24 months.

According to S&P’s report, “Saudi Capital Market Overview: Rising Issuance Levels Are Just the Start”, Saudi companies have dominated issuance activity in recent years. Over the past five years, Saudi entities, including government-related entities, have accounted for roughly two-thirds of non-governmental US dollar-denominated issuances. However, the report predicted that banks will play an increasingly significant role in the future.

The report noted that Saudi issuers have raised over $130 billion in US dollar-denominated issuances over the last five years. This adds to $144 billion raised domestically in Saudi riyals during the same period, driven by Vision 2030 initiatives.

While the government accounts for about 60% of these issuances, the Kingdom’s Vision 2030 has created expansive opportunities in the non-oil economy and banking system, paving the way for future growth, the report underlined.

S&P highlighted the development of Saudi Arabia’s mortgage-backed securities market as a key factor to watch over the next two years. As of the end of September 2024, Saudi banks held more than $175 billion in mortgage financing, most of which carried fixed interest rates but were funded through short-term resources, primarily local deposits.

With declining interest rates, some of these mortgages could re-enter circulation, enabling banks to sell them in the secondary market without incurring losses. This would allow banks to offload mortgage financing from their balance sheets, provided legal challenges surrounding the mortgage-backed securities issuance are resolved or mitigated sufficiently to attract local and international investor interest.

According to the report, developing the mortgage-backed securities market could significantly enhance banks’ financial capacity, enabling them to better support the implementation of Vision 2030. This could occur through existing infrastructure, such as the Saudi Real Estate Refinance Company, or via direct issuances in the capital markets.