Saudi Arabia’s Tourism Development Fund (TDF) has teamed up with one of the Kingdom’s largest banks to co-fund a SR1.3 billion ($346 million) development in Madinah.

Knowledge Economic City (KEC) has agreed to borrow SR782 million from TDF and Riyad Bank to develop Knowledge City Hub, a 68,000 square meter site about six kilometers from the Prophet’s Mosque, TDF said in a statement.

The financing will be repaid over 13 years with collateral in the form of plots of land from the company’s land portfolio, according to a stock exchange filing.

Knowledge City Hub is made up of a mall, commercial, residential and entertainment services and a 325-room 5-star hotel, which KEC said would be managed by Hilton.

Construction is due to start in August 2021 and to be completed by end 2023 with the hotel finished in May 2024.

“This agreement is one of several successful agreements with local banks aimed at providing investors with attractive financial solutions that encourage investments into this promising sector," Qusai Al-Fakhri, chief executive officer of TDF, said in a statement. "It exemplifies our commitment to delivering on the National Tourism Strategy, increasing the GDP contribution of the tourism sector from 3 percent to 10 percent by 2030 and creating 1 million new jobs.”

Separately, Knowledge Economic City said it had also agreed terms for the management of the Madinah Gate Fund Project Development with Riyadh Capital.

Madinah Gate is a vast redevelopment of land adjacent to the Haramain High Speed Train Station in the city. It will include a 4-star hotel and a bus station connected directly to the train station.

The detailed development includes a commercial and entertainment center with 23,000 square meters of leasable area with 78 shops, 39 restaurants and cafes, two entertainment centers, a cinema with 800 seats capacity, and 800 parking spaces.