In a move reflecting the growth of its business and the expansion of its projects, the Saudi Real Estate Company (Al-Aqar) announced that its subsidiary, the Saudi Real Estate Infrastructure Company (Bunya), has signed a Sharia-compliant credit facility agreement with Alinma Bank with a total value of SAR 550 million.
According to the official statement published on the Saudi Stock Exchange (Tadawul) website on Sunday, the financing agreement was signed on January 8. The financing term is one year, renewable, and a promissory note has been provided as collateral. The company also noted in its statement that the Public Investment Fund (PIF) is a related party in this transaction due to its significant ownership stake in the real estate company.
Financing objectives and enhancing financial solvency
This strategic financing aims primarily to support Binyah's existing operational projects, as well as enhance the company's financial efficiency and increase its creditworthiness to enable it to finance and participate in major future projects. This comes at a time when the contracting and infrastructure sector in Saudi Arabia is experiencing unprecedented growth.
About Bunya Company and its pivotal role
The Saudi Real Estate Infrastructure Company (Binya) is a key national pillar in the construction sector, with the Saudi Real Estate Company holding a 60% majority stake. The company plays a vital role in implementing the infrastructure for major projects across the Kingdom.
“Bunya” is distinguished by its broad and comprehensive scope of work covering all urban development needs, specializing in:
- Construction of roads, streets, sidewalks, road infrastructure and lighting.
- Construction of complex bridges and tunnels.
- Extension of oil and gas networks and pipelines.
- Construction of stations and main lines for water distribution and sewage projects.
- Implementation of marine works and port docks.
- Site preparation works including excavation, leveling and demolition.
Economic context and the importance of timing
This agreement is particularly significant given the construction boom Saudi Arabia is experiencing under Vision 2030. The infrastructure sector is considered the backbone of the mega-projects currently underway. Securing such substantial financing from a leading bank like Alinma Bank for a specialized national company like Binyah strengthens the local private sector's ability to meet the demands of the next phase and reduces reliance on foreign companies for essential work.
The presence of the Public Investment Fund as a related party also reflects the great support that national companies enjoy to enable them to lead the development engine, which contributes to enhancing local content and raising the efficiency of implementing both governmental and private projects.
