Riyadh – Mubasher: Knowledge Economic City, a major real estate development entity, has finalized a Sharia-compliant financing agreement with Riyad Bank for a total of SAR 150 million, according to a bourse filing.
This facility is specifically earmarked to accelerate the development of the Islamic World Avenue project, focusing on the implementation of the first and second groups within the project’s initial phase.
The financing agreement was officially announced following its formalization on 17 June 2026, representing a targeted project financing strategy by Knowledge Economic City.
Meanwhile, the funding will be utilized to fund the construction and development works of Groups 1 and 2 of Phase 1 of the Islamic World Avenue. This project is a central component of the company’s broader vision to enhance the urban and commercial landscape of Madinah, providing integrated services and infrastructure.
Under the terms of the credit facility, the funds will not be drawn down in a single installment. Instead, the disclosure specifies that the financing will be used according to the actual needs and progression of the project.
In addition, this drawdown structure allows Knowledge Economic City to manage its capital requirements efficiently, ensuring that debt is only incurred as construction milestones are reached and specific project costs arise.
The duration of the financing is set for one year, which reflects a short-term tenure that suggests a bridge-financing role while providing the necessary liquidity to maintain construction momentum during a critical phase of the development.
To secure the facility, Knowledge Economic City has provided Riyad Bank with a comprehensive security package. This includes the mortgage of specific land plots owned by the company, which serve as tangible collateral for the lender.
In addition to the land mortgages, the company has issued promissory notes, a standard legal instrument in Saudi corporate finance that provides further security and commitment for the fulfillment of the debt obligation.
A key aspect of the disclosure is the confirmation that there are no related parties involved in the transaction. This indicates that the financing was secured through standard commercial banking channels and that the terms of the agreement were reached on an arm’s length basis, free from any conflicts of interest involving the company’s board or major shareholders.
The Islamic World Avenue project is expected to be a significant addition to the hospitality and residential sectors in the region.
By securing this facility from Riyad Bank, Knowledge Economic City demonstrates its ability to access the Saudi capital markets and maintain the support of major financial institutions for its large-scale urban initiatives.
The successful execution of the first and second groups of Phase 1 will be a vital indicator of the project’s overall trajectory and the company’s ability to meet its strategic development targets.
Moreover, this financial injection ensures that the necessary resources are in place to continue the physical transformation of the site in accordance with the planned schedule.
