KEC Secures SAR 150M Riyad Bank Facility for Project Use

Knowledge Economic City (KEC) obtained a SAR 150 million Shariah-compliant financing facility from Riyad Bank, to be utilized according to the project. The company said the financing is secured by land mortgages and promissory notes.

The facility adds to KEC's existing debt stack at a time when Saudi-listed developers are leaning on bank credit to fund infrastructure buildout. Riyad Bank has been an active lender in the sector, extending similar credit lines to Al Naqool and WAJA Co. in recent months. The secured structure – land mortgages plus promissory notes – gives the bank priority claims on specific assets, a standard feature for project-linked financing in the kingdom.

For KEC, the SAR 150 million line provides working capital flexibility without diluting equity. The company's Madinah-based economic city project requires sustained capital deployment across residential, commercial, and logistics zones. A credit facility tied to land collateral keeps the cost of funds below what unsecured debt would command, though it also ties up assets that could otherwise be sold or developed.

The read-through for the sector is straightforward: banks are willing to lend against physical assets in Saudi Arabia's real estate development space, and developers are taking that liquidity. That pattern has held across multiple Riyad Bank deals this year. The risk lies in leverage accumulation – each secured facility reduces the unencumbered asset base, narrowing future refinancing options if property values soften or rental demand slows.

KEC did not disclose the facility's tenor or margin. The company's next quarterly filing will show whether the new debt shifts its gearing ratio materially. For now, the deal signals that project-linked bank credit remains available and priced for developers with land collateral, even as broader Saudi interest rates track the U.S. Federal Reserve's path.