Jeddah: The International Finance Corporation said its Saudi Home Loans Company venture plans to spend 7.5 billion Saudi riyals (Dh7.3 billion) to build 15,000 homes for middle-income Saudis by 2020.

International Finance Corporation Saudi country manager Walid Al Murshed said the venture with Saudi partners would provide 2.5 million riyals to build 5,000 homes over the next three years alone.

"We have around 1 billion riyals in cash and we need to raise the remaining 1.5 billion riyals," he said.

Al Murshed said Saudi Home Loans would probably borrow some of the funds from banks. It was also considering a sale of bonds or Islamic bonds, known as sukuk, to secure the rest of the money.

The IFC estimates Saudi Arabia needs to build 200,000 homes a year to serve a population that is growing by 2.5 per cent a year.

"There is a huge shortage of middle-income housing in Saudi Arabia and lenders don't have access to long-term finance to allow them to issue more housing loans," said Al Murshed.

The venture, known as Saudi Home Loans, has spent 1 billion riyals to fin-ance 1,600 new homes in the past two years.

The new money was not dependent on a mortgage law currently under consideration by the government, Al Murshed said.

Saudi Home Loans began in 2007 and is a joint venture between the IFC, Arab National Bank, Saudi Arabia's Dar Al Arkan Real Estate Development Company, and Kingdom Installment Company.