Chinese builder picked for $1bn Medina projects

ECZA

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Agreements worth nearly $1 billion have been signed with a Chinese construction major to build two mixed-use projects in Saudi Arabia’s Knowledge Economic City (KEC) in Medina.

A filing by KEC to the Saudi Stock Exchange on Wednesday revealed that a $400 million deal has been agreed with China Gezhouba International Engineering Group Company (CGGC) to build the Al-Alya project. 

A separate deal for phase one of the Islamic World District project is worth $570 million.

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Al-Alya includes residential, offices, hospitality and retail plots.

The 900,000 sq m Islamic World District is one of the largest plots in KEC and will be connected to the Haramain high speed train station. The first phase, for which the agreement was signed, includes a chain of hotels and apartments.

KEC said the project aims to bridge the gap in demand for hotel rooms in Medina as part of the Saudi Vision 2030 plan to increase annual visitor numbers to the holy city to 30 million.

KEC is about 5km from the Prophet’s Mosque in Medina, the destination for millions of Muslim pilgrims each year.

The agreement for Al-Alya covers construction, material supply and finishing as general contractor for the project while CGGC will additionally be responsible for infrastructure work on the Islamic World District.

According to the latest Belt and Road Initiative investment report, of the 45 countries receiving Chinese investment, Saudi Arabia had the highest construction volume – $3.8 billion – in the first half of 2023.