A three-party consortium including Hanwha Engineering & Construction has won a $20 billion project to build 100,000 homes in Saudi Arabia, company officials said Thursday.
The housing development plan will mark the largest ever project that a Korean builder has clinched from a foreign country, Hanwha officials said.
The two other stakeholders in the consortium are Daewoo Engineering & Construction and Saudi Pan Kingdom for Trading, Ind. & Contracting, or SAPAC, a leading Saudi builder.
Representatives from the three builders signed a memorandum of understanding with the Saudi Arabian Housing of Ministry for the new city development project in a Seoul hotel on Thursday.
“We will supply 100,000 houses and city infrastructure in Alfursan near the Riyadh International Airport and this will be a landmark deal for Korea’s overseas construction history in terms of the size,” a Hanwha E&C spokesman said.
Hanwha E&C president Choi Kwang-ho (fifth from right), Daewoo E&C president Park Young-shik (fourth from left) and Saudi Housing Minister Majed al-Hogail (center) pose during a memorandum of understanding signing ceremony to build 100,000 homes in Saudi Arabia in a Seoul hotel on Thursday. Hanwha E&C New Growth Strategy Team Leader Kim Dong-sun (fourth from right), the third son of Hanwha Group chairman Kim Seung-youn, also attended the event. (Hanwha E&C)
The company said the visit by Saudi Housing Minister Majed al-Hogail to Korea for the MOU signing ceremony will help the company win other housing projects worth $400 billion being pushed by the Saudi government in the coming seven years.
The Saudi Ministry estimated last year that the kingdom’s lack of housing infrastructure would require 3 million new homes by 2025, based on projected growth of the population.
“It is too early to tell the details of the deal, but the consortium expects to push for the mega project with a stable financing source, backed by the Saudi government,” the company said in a press release.
“The company has sought the deal, which will be helpful to cement its reputation as a global city developer in the Middle East, following the ongoing Bismayah new city project in Iraq,” said Hanwha E&C CEO Choi Kwang-ho at the MOU ceremony at the JW Marriott Seoul. In 2014, the builder won the Bismayah project worth $8 billion in 2014 from the Iraqi government.
The progress for the builder’s second city development project overseas lifted shares of Hanwha Corp., which holds a 100 percent stake in Hanwha E&C, to 36,200 won ($30.90), a 0.56 percent increase from 36,000 won on the previous day.
Citing the winning of the mega project, KB Investment & Securities raised the target stock price of Hanwha Corp. to 50,000 won per share, around 40 percent up from the current price.
By Seo Jee-yeon (firstname.lastname@example.org