The Ports Development Company, a partnership between two Middle Eastern finance companies, has agreed to fund Saudi Arabia's first privately-owned port facility.
PDC, a partnership between Dubai-based development firm Emaar the Economic City and Huta Marine Works, a subsidiary of Jeddah-based construction company Saudi Binladin Group, will finance the King Abdullah Port for 2.7 billion Saudi Riyal ($719 million; €656 million).
The port represents one of the largest ever project financings for a Middle East transportation project and the first privately-owned and funded port facility in Saudi Arabia. The Saudi British Bank and the Arab National Bank joined as project sponsors.
Financing will allow the next phase of development for the project, expanding the port's southern basin. Once completed, the King Abdullah Port will be one of the 10 largest ports in the world. The port is expected to be able to handle 20 million containers, 1.5 million vehicles, and 15 million tons of bulk and general cargo shipping.
King Abdullah Port is located on Saudi Arabia's Red Sea coast, 100 kilometres north of its second-largest city, Jeddah, and close to the Suez Canal. It began partial operations in January 2014.
Financing for the project was announced on the same day Saudi Arabia conducted its first global bond offer, seeking to close a budget deficit caused by a decline in oil prices. In doing so, the kingdom raised $17.5 billion, the largest amount ever for a first-time emerging market bond offer.