Saudi Arabia to Combine PIF-Backed Red Sea Coast Developers
(Bloomberg) -- Saudi Arabia plans to combine two state-controlled developers on the Red Sea coast as it pushes ahead with opening up the kingdom for more tourists.
The Red Sea Development Co. will take over Amaala, both owned by the country’s Public Investment Fund and building adjacent tourist destinations, John Pagano, chief executive officer of both companies, said in an interview Monday. He declined to give financial details.
Opening up to tourism is one of the ways Saudi Arabia intends to diversify its economy and cut its reliance on oil. Its other ambitious projects include an entertainment hub near the capital and a new city in the north-west called Neom that’s expected to cost $500 billion to build.
ACWA Power, one of the country’s main vehicles for building renewable energy projects, will build a battery storage facility at the site to ensure it can run on renewable power, Pagano said. “For at least a small period of time, our claim to fame will be the biggest battery storage system in the world.”
The Red Sea projects are expected to house 16 hotels by 2023, with 3,000 rooms. “In regard to the various hotel brands, we are hopefully going to sign a number of deals over the coming days,” said Pagano. “All the major players are very keen to be part of the Red Sea.”
The partnerships are likely to be announced during the kingdom’s Future Investment Initiative summit in October.
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