IFC signs $100 million Islamic green facility for Yiti, its first Oman property deal
The OMR 38.5 million facility with SDIC funds the 1,225-unit Plaza District, weeks before OMRAN signed $318 million of new developer agreements.
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The International Finance Corporation has signed an OMR 38.5 million ($100 million) Islamic green finance facility with the Sustainable Development Investment Company to build the Plaza District of The Sustainable City - Yiti in Muscat, the World Bank Group lender said on 30 September. The IFC said the deal is its first real estate investment in Oman.
The facility will be used exclusively for the Plaza District, according to the notes to the IFC release. The IFC describes the structure as Sharia-compliant financing for verified environmental projects under the Green Loan Principles. The release does not give the tenor, the pricing or the form of the Islamic contract used.
Who is behind the project
SDIC is a joint venture between OMRAN Group and SEE Holding, the IFC said. OMRAN Group, formally the Oman Tourism Development Company, has as its chairman Azzan bin Qassim Al Busaidi, the undersecretary for tourism at the Ministry of Heritage and Tourism, according to an OMRAN statement. SEE Holding's founder and chairman is Faris Saeed, according to the IFC.
The Plaza is planned as the commercial centre of the development: 19 buildings with 1,225 residential units, together with office and retail space, schools, healthcare and social facilities. The IFC expects all buildings to be EDGE Advanced certified, saving more than 6,000 megawatt hours of energy and more than 80,000 cubic metres of water a year. The wider city is designed to house more than 10,000 residents, and create about 2,200 direct and indirect jobs, and it is expected to become the world's first net-zero emissions city by 2040, according to the release.
Abdullah Jefri, the IFC's division director for the Gulf Cooperation Council, said in the release: "This project demonstrates that cities can meet growing urban housing demands while advancing sustainability goals."
The release attributes the same statement, word for word, to both Faris Saeed and Saif Sulaiman Al Yarubi, SDIC's chairman, beginning: "This milestone marks an important step in the continued evolution of The Sustainable City - Yiti."
More developer money at Yiti
On 13 October OMRAN announced three development agreements with a combined development and investment value of more than OMR 122 million (about $318 million), it said. One of them sits in the same destination as the IFC-backed project: Aurelian Development will invest in and deliver Yiti Hills and Oases, the fourth phase of the masterplan for Yiti Integrated Tourism Development, covering about 200,000 square metres with a luxury five-star resort and 490 residential units. OMRAN put that investment at OMR 78 million (about $203 million), with Aurelian overseeing design, construction, marketing and sales.
The other two agreements, with Hassan Allam Holding's real estate arm Grova Developments, cover two residential projects at Madinat Al Irfan in Muscat with a combined value of OMR 44.5 million (about $115 million): a residential neighbourhood valued at OMR 29 million and a branded residences project at OMR 15.5 million, both to be built by Hassan Allam Construction, according to OMRAN.
Ayad Ali Al Balushi, OMRAN's chief executive, said the Yiti agreement "reflects our approach to attracting foreign direct investment and collaborating with leading international developers to deliver projects that create added value."
What the IFC says the deal shows
The IFC presented the facility as a demonstration case. It said the financing supports international financing into Oman and shows the use of green Islamic finance structures to mobilise additional private capital, and that the investment is aligned with the World Bank Group's priorities in the country, which include job creation, sustainability and economic diversification under Oman Vision 2040, according to the release. It did not say whether other lenders would join the Plaza facility or whether further IFC real estate deals in Oman are in preparation.