Saudi Emaar to get SR5bn government funding

Saudi developer Emaar Economic City, an affiliate of Dubai's Emaar Properties, will receive a long-term loan of about SR5 billion (Dh4.89bn) from the Ministry of Finance, a source close to the deal said yesterday.

The firm, which is developing the King Abdullah Economic City (KAEC) project on the Red Sea coast, has faced delays in the execution of some of its projects.

"The funds will be used to speed up the development of the city," said the source.

Officials at Saudi Emaar were not immediately available for comment. Emaar spokespeople did not immediately return requests for comment. KAEC is the most prominent among a series of "economic cities" that Saudi Arabia is planning to diversify the country's economy away from oil and gas, as well as to provide jobs for the country's growing population of about 25 million.

Emaar Economic City has faced delays in delivering some housing and business units, as well as a delay on the first phase of the city's port, which it expects to complete in 2012 after signing a SR4bn joint venture last year with Saudi Binladin Group to finance, develop and operate the port. Emaar Economic City headquarters have already shifted a large number of its staff to the KAEC.

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