Pinsent Masons advises on multibillion dollar project financing deal in Middle East

Each of the five communities are intended to provide housing for 10,000 people, will be around 567,083 square meters, and include over 237 labour accommodation units, multiple sports and entertainment facilities, dining facilities, access to medical care, mosques, utility buildings and various other facilities. This comprises just phase 1 of NEOM’s plans for residential communities for its workforce.

The Pinsent Masons team was led by partners Gurmeet Kaur and David Platt and made up of a large, cross border team from Dubai, Riyadh, Singapore and the UK.

Gurmeet Kaur said, “This is the first accommodation social infrastructure PPP for Neom to reach financial close and a great testament to the team for working through some challenging issues to get lenders, sponsors and NEOM comfortable with the overall structure, which is a departure from the traditional approach to accommodation projects in the Kingdom”.

Pinsent Masons acted for lenders Saudi British Bank/HSBC, Riyad Bank and Alinma Bank on the provision of senior debt financing, VAT financing and equity bridge financing to each of the five communities. All are owned by Alfanar Global Development, a part of Alfanar Projects which is a leading global project developer, engineering construction & technology solutions company. The deal was effected on the basis of an all Islamic financing structure. The project documents marked a departure from traditional EPC structures and other PPP contracts/concessions and was based on a design, build, finance and operate and maintain model, based on a FIDIC model.

David Platt said, “This was a complicated financing on the basis of an all Islamic financing structure but is a hugely significant public-private partnership marking the attraction of domestic investment.”