Notice

Category A project supported: Six Flags Theme Park, Qiddiya, Kingdom of Saudi Arabia

Published 9 August 2024

1. Project description

UKEF has guaranteed an Islamic Murabaha financing facility signed by Qiddiya Investment Company to finance the construction of the Six Flags Qiddiya City theme park.

Located approximately 45 km southwest of Riyadh, Qiddiya City intends to become an international entertainment and tourist destination. The Six Flags Qiddiya theme park will be one of the experiences offered at Qiddiya site. Six Flags Qiddiya will be spread across six themed lands, and the park itself features a range of record-breaking rides and attractions.

The Project includes:

• Goods and services for the construction of the theme park; and
• Operation of the theme park.

The Banks involved are Crédit Agricole CIB, BNP Paribas and HSBC.

UKEF was supported by reinsurance from the Dutch ECA Atradius Dutch State Business N.V., the Italian ECA SACE S.p.A., and the German ECA Euler-Hermes Aktiengesellschaft.

2. Project sector

The Project is in the civil construction sector.

3. Project sponsors

The Project is being developed by Qiddiya Investment Company.

4. UK exporters

Unincorporated JV led by Bouygues Batiment International  and Almabani General Contractor Company.

5. Export Credit Agent Bank

Crédit Agricole CIB.

6. Amount of UK Export Finance Support

The principal value of the support is approximately US$700 million.

7. OECD Common Approaches and Equator Principles

UK Export Finance categorised the Project as Category A i.e. having potentially significant environmental, social and human rights (ESHR) impacts in accordance with the definition in the 2012 (Revised 2024) OECD Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (the “OECD Common Approaches”) and the Equator Principles (2020).

As required by the OECD Common Approaches, UK Export Finance disclosed its possible involvement in the Project. A notification was posted on the UK Export Finance web site in February 2023, which directed interested parties to the contact from where published ESHR information can be sourced. UK Export Finance did not receive any comments from interested parties.

Ramboll was commissioned by Qiddiya Investment Company to undertake an independent environmental and social due diligence review on behalf of the Lender group.

8. Environmental, social and human rights standards

Project related ESHR documentation was reviewed for their alignment against the 2012 International Finance Corporation (IFC) Performance Standards (PS) on Environmental and Social Sustainability and the World Bank Group Environmental, Health and Safety (EHS) Guidelines.

The applicable IFC PS were:

• PS1: Assessment and Management of Environmental and Social Risks and Impacts;
• PS2: Labour and Working Conditions;
• PS3: Resource Efficiency and Pollution Prevention;
• PS4: Community Health, Safety and Security;
• PS5: Land Acquisition and Involuntary Resettlement;
• PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources; and
• PS8: Cultural Heritage.

The applicable World Bank Group EHS Guidelines were:

• General EHS Guidelines (2007); and
• EHS Guidelines for Tourism and Hospitality Development (2007).

9. Nature of ESHR impacts

The review of potential ESHR risks and impacts took into account the following impacts, receptors and issues during the construction and operational phases of the Project:

• health and safety;
• emissions to the atmosphere (including land, air and water);
• wastewater treatment;
• waste and hazardous material management;
• emergency planning and response;
• construction camp conditions;
• grievance mechanisms;
• worker conditions of contract; and
• community engagement.

10. Assessment of ESHR impacts

A review was undertaken in line with the requirements of the OECD Common Approaches and Equator Principles to identify potential ESHR risks and impacts of the Project and how these would be effectively managed.

Ramboll was appointed as the Independent Environmental and Social Consultant (IESC) with a duty of care to the Lenders and were commissioned to undertake an ESDD assessment of the Project. The report formed the basis for UKEF’s evaluation of the Project’s alignment with the relevant standards and recommendations for compliance and monitoring.

The review included:

• IESC site visits in February 2022 and February 2023;
• Desk-based review of Project-related documentation: Environmental and Social Impact Assessment, Environmental and Social Management Plans, and Stakeholder Engagement Plan; and
• Follow-up meetings and interviews with relevant Project representatives.

The results of this review formed the basis for the evaluation of the Project’s alignment with relevant international standards, and recommendations for future compliance and monitoring.

Taking account of the review, the Project was deemed to have potential to cause a number of adverse environmental and social impacts both during construction and operation. However, a proposed suite of controls as part of the Project’s environmental and social management systems should facilitate the management of these impacts.

11. Climate change considerations

UKEF considered the potential direct and indirect greenhouse gas (GHG) emissions of the Project and effects of climate change factors on the Project as part of its ESHR review.

The Project is not considered to be a carbon intensive undertaking (such as fossil fuels or petrochemical) and so “high” GHG emissions in excess of relevant thresholds for quantification and reporting set by international standards were reasonably not envisaged.

The review revealed that the Project design has considered potential physical impacts of climate change such as changes to rainfall and weather patterns.

12. Decision

Various actions have been agreed between the Project developer, operator, and parties involved in the financing, which are necessary to ensure the Project’s on-going alignment with international standards. Following agreement of these commitments, it was concluded that the Project should meet the relevant international standards over the Project cycle. UKEF has therefore decided to provide its support in respect of the supply of goods and services by UK exporters to the Project.

A condition of support is that the Project will be subject to monitoring and reporting in order to provide satisfaction that the Project is aligned with the relevant international standards throughout the duration of support.