The timeframe for this is now under review, government sources have said. Much of the financing will be in the form of project finance.

One agency, the Saudi Industrial Property Authority (Modon), is seeking foreign investors for the industrial cities it is planning and supervising. A self-funded, independent government agency, Modon acquires the land on which these cities are built and encourages the participation of the private sector in these projects.

One such a project is Sudair City, located between the cities of Riyadh and Al Qassim and spread across 265 million square metres for which Modon has just completed the masterplan and the first phase of planning. Bidding for the consortium of developers will take place in the next couple of months and an announcement made by the end of the year, Modon representatives have said. The first phase of the city will cost SR2bn ($530m).

Among the other projects is the construction of a new substation at Al Kharj Industrial City and a highway project for Al Madina Industrial City. Both projects are open to tender.

There are 14 established industrial cities, four new industrial cities under construction, nine in the planning phase, and another five industrial cities owned by the private sector.

Projects could be 100% foreign-owned or a foreign investor could be involved in a joint venture, a Modon spokesperson said. But before they invest in the country investors need to be licensed by the Saudi Arabian General Investment Authority (SAGIA), the country’s principal agency overseeing the flow of foreign investment and which regulates all foreign investors.

Lucia Dore is the Gulf correspondent at mergermarket, part of The Financial Times Group.

E-mail: lucia.dore@mergermarket.com