Citic Holding IF Group LLC, a Delaware-based investment company that also belongs to Chinese infrastructures player CITIC, launched a financial platform of 450 million US Dollars for supporting the Saudi Vision 2030 programmes of urban, residential and industrial development (press release). Mohammed bin Salman structured this project that aims to channel hundreds of billion US Dollars worth investments for the economic change of the country aimed at reducing dependence on the oil.
The financing structure includes a 300 million tranche of Sukuk Istisna’a, Sharia-compliant Islamic certificates linked to real assets and construction-progress contracts, and a 150 million subordinated mezzanine debt facility for covering liquidity, procurement and operational funding requirements.
The company said that the initiative does not establish a new independent business unit and does not alter the agreements already announced by the parties involved in the Saudi programmes. Citic will act solely as the promoter and structurer of the financial component, keeping funding activities separate from those relating to property development, construction, engineering, procurement and construction (EPC), and operational management.
The transaction, that the group announced on 8 June, Monday, involves the establishment of a Special Purpose Vehicle compliant with the rules of the Abu Dhabi Global Market (ADGM) through which it will raise and allocate financial resources to support initiatives already underway in the Khuzam/Tilal Khuzam area, north of Riyadh, and to strengthen the local construction materials sector and its supply chain.
The Khuzam and Tilal Khuzam area is one of the fastest-growing parts of the Saudi capital, whose current population of around 8 million could grow to over 15 million by 2030 with the boost of a vast programme of new housing, transport infrastructure, urban services and industrial estates. In September 2024, Citic Construction, a subsidiary of Citic Group, the Saudi National Housing Company (NHC) and Rafal Real Estate announced the launch of the residential project Tilal Khuzam (Khuzam Hills), one of the most significant housing developments planned for the northern area of Riyadh. The project covers approximately 630,000 square metres and involves the construction of around 3,500 flats in several phases, with the first phase that could complete this year (South China Morning Post).
The 450 million financial platform of Citic Holding IF Group is therefore a tool for complementing initiatives that are already part of Vision 2030 without altering existing industrial and operational structures. Such resources may primarily finance urbanisation works, service infrastructure, technological components, energy efficiency systems and the creation of new integrated residential communities.
The second strand, however, concerns the strengthening of the industrial construction sector, one of the central themes of the Saudi strategy for localising production. This is one of the key objectives of Saudi Vision 2030, which aims to build new cities and residential neighbourhoods and increase the local production of an increasing share of the materials, components and technologies that the Saudi Kingdom currently imports from abroad. In this case, capital may support the sectors of machinery, automated production lines, robotic systems, industrial equipment and logistics infrastructure for increasing the Kingdom’s domestic manufacturing capacity in the construction materials sector.
Citic designed such platform for supporting these programmes through a segregated and regulated unit. The SPV incorporated under the ADGM will act as a hub for the raising and distribution of capital, ensuring asset segregation, traceability of cash flows, milestone-based management, and the separation of financial risk from operational risk.
The Abu Dhabi office of Avocom Law Firm Holding Ltd, an advisor with consolidated relations with Citic, handled the international legal and financial architecture of the transaction, in all its transactions. The lawyers coordinated the structuring of the ADGM SPV, the financial and contractual documentation, the Islamic finance aspects and the international compliance matters.
Francesco Del Bene, managing partner of Avocom, said: “The financial contribution that Citic Holding IF Group LLC provided through the ADGM compliant SPV has a structure that fit seamlessly within the framework of the programmes linked to Vision 2030. The combination of Sukuk Istisna’a, mezzanine debt and a dedicated vehicle allow us to strengthen the financial dimension of the initiatives, without overlapping with the industrial agreements already announced, but rather supporting them with an orderly, traceable and scalable capital platform.”
In March 2025, CITIC said it joined First Abu Dhabi Bank, Abu Dhabi Commercial Bank, Korea Development Bank and Qatar National Bank for providing a 500 million financing package for the Amiral Industrial Wastewater Treatment & Reuse Project (IWWTP), located in Jubail Industrial City 2, in Saudi Arabia, one of the largest industrial water reuse complexes in the Middle East, with an annual treatment capacity of approximately 8.8 million cubic metres (see here a previous post by BeBeez)
