The firm that’s transforming an archipelago, desert and mountains — an area about the size of Belgium — on Saudi Arabia’s Red Sea coast into a global tourism destination is talking to banks to raise $3.5 billion, according to people with knowledge of the matter.

The Red Sea Development Co. started discussions with local lenders for a 13 billion-riyal loan in what would be its first borrowing, the people said, asking not to be identified because the matter is private. The loan may have a 15-year tenor and is likely to be backed by the kingdom’s sovereign wealth fund, the Public Investment Fund, some of the people said.

The terms of the financing may change and the company hopes to complete a deal by the end of the year, the people said.

“We are in active discussions with a number banks to provide debt financing and are encouraged by the overwhelming positive response we have received,” Jay Rosen, head of finance and investments at the Red Sea Development Co., said in response to questions.

Saudi Arabia is developing its coastline as part of plans to transform the economy and cut its reliance on oil. The project will cover 90 islands and 28,000 square kilometers (11,000 square miles).

The kingdom is also developing a cultural, sports and entertainment city, a $500 billion futuristic city, known as Neom, and a luxury destination on its northwest coast

The first phase of the Red Sea project is expected to be completed by 2022. When fully-completed in 2030, the company expects the development to create as many as 70,000 jobs and contribute as much as $5.9 billion riyals to the kingdom’s gross domestic product. More

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