Construction

Jeddah’s residential canal project takes shape

April 25, 2025, 2:57 PM

People on the Jeddah waterfront. The Marafy canal will run 10km inland from the coast

Marafy will house 130,000
10km-long canal from Red Sea
Seven phases over three years

Construction work on Marafy, a residential canal-waterfront project in Saudi Arabia’s second city, Jeddah, is gathering pace.

Driven by Roshn Group, the property developer unit of the government’s Public Investment Fund (PIF), the development will have capacity to house more than 130,000 people.

Though no cost for the Marafy project has been made public, in October Roshn secured a $2.4 billion credit facility from a group of Saudi banks to finance its work across the country.

Marafy, in north Jeddah, will feature a 10.2km long, 100-metre wide canal stretching inland from the Red Sea coast, extending the natural Obhur Creek through one of Jeddah’s fastest-developing districts.

The project is akin to the Dubai canal, which links the top of its natural inland creek back to the waters of the Gulf, along which scores of apartment blocks have been built. That canal is 3.2km long.

“I don’t think there are too many people with canals like this; we are actively digging a very big hole as we speak,” Roger Fatovic, group chief projects delivery officer at Roshn, said in a webinar this week.

Like emirate-supported Dubai’s Emaar Properties or Abu Dhabi’s Aldar Properties, Roshn is at the forefront of Saudi Arabia’s state-backed efforts to develop housing in the kingdom, though its focus is more on providing for the country’s 20 million citizens and raising homeownership among them.

But this and other ambitious infrastructure projects are coming at a cost to state coffers of up to $1 trillion, at a time when the international price of oil – on which the government relies for about 60 percent of its revenue – is declining, raising concerns around government spending and borrowing.

PIF, which manages assets worth close to $1 trillion, has ordered budgetary cuts in spending this year across more than 100 of its portfolio companies, leading to layoffs, hiring freezes and project delays, AGBI reported last month.

Roshn’s role includes helping the government in its Vision 2030 economic and social development strategy of raising national homeownership to 70 percent by the end of the decade, compared with 64 percent towards the end of 2023.

Marafy “really is only a drop in the bucket of what we’ve got coming up”, Fatovic said during the webinar organised by Middle East Economic Digest.

Spanning nearly seven million square metres, Marafy will be developed in seven phases over three years.

The first includes excavation of 3km of canal and the construction of three pedestrian bridges.

On completion, the project will consist of 52,000 residential units, nine major public bridges and an array of retail, hospitality and leisure space.

Underpinned by a land bank of 200 million square metres, Roshn is working on 13 projects across the country, delivering 30,000 units in its longer term aim of 400,000 homes nationwide.

Saudi Arabia is poised to become the world’s largest construction market by the end of 2028, with a projected construction output value of $181.5 billion across all sectors, according to a 2024 report by global property consultancy Knight Frank.

Over and above the $2.4 billion October credit facility, Roshn is in talks to borrow another almost $670 million to an international lender to finance operations.