Riding Falcon’s Flight on Saudi Arabia’s Balance Sheet

Falcon’s Flight – the new record-breaking rollercoaster at Six Flags Qiddiya City – doesn’t believe in easing you in. From its highest point, riders drop off a cliff and accelerate to roughly 250km/h. That’s Formula 1 speed, except you’re not wearing a helmet, and your seat belt is doing its best.

But the bigger drop is the one you don’t see.

Six Flags Qiddiya City – a $1bn park outside Riyadh – is the first major piece of Qiddiya to open. Symbolically, it matters. Vision 2030 has had delays and cost blowouts elsewhere – Neom in particular. Neom is Saudi Arabia’s vast planned mega-region in the north-west, announced in 2017, best known for The Line (the 170km mirror-city concept). So, something real opening to the public is a useful moment of “see, we can finish things”.

So yes, this is a rollercoaster story. But it’s also a funding story – and the interesting bit is how Saudi Arabia is trying to pay for an entire “entertainment city” using sovereign wealth, Islamic finance, and public-private partnerships, while gradually shifting risk away from the state as the project grows up.

The Real Story Behind Qiddiya

On the surface, Qiddiya looks like another Gulf mega resort – a desert answer to Orlando, but with more VIP lounges and fewer tat shops.

Legally and financially, it’s more specific: a state-led city-building exercise owned and controlled by the kingdom’s sovereign wealth fund, the Public Investment Fund (PIF), and the centrepiece of Crown Prince Mohammed bin Salman’s Vision 2030 plan to diversify the economy away from oil.

The ambition is enormous. Official material describes Qiddiya as a 330+ square kilometre destination for entertainment, sports and culture, capable (eventually) of hosting hundreds of thousands of residents, supporting hundreds of thousands of direct and indirect jobs, and adding tens of billions of dollars to GDP once fully built.

The business model, at least as Qiddiya’s leadership describes it, is simple on paper: visitors spend money, and that spending funds the ecosystem. PIF takes the early risk so private money can join later, once things look less like a dream and more like a business.

The Legal Chassis: One Company, Firmly Held

Under the glossy branding sits a straightforward legal wrapper.

Qiddiya Investment Company (QIC) was incorporated in 2018 as a closed joint stock company, wholly owned by PIF and subject to Saudi law. QIC holds the land, the intellectual property and the master planning rights for the project area. In plain terms: it’s the entity that owns the project and signs the contracts.

QIC acts as the master developer. It signs:

• Construction Contracts (often called EPC contracts) with the builders – the people who turn sand into concrete and then send invoices with alarming confidence.
• Operating and brand agreements with partners like Six Flags.
• Long-term PPP contracts for transport and utilities – the unsexy bits that make a city function.

Governance-wise, QIC doesn’t get to wander off piste. Its board is appointed by PIF and includes senior officials, which keeps it tightly aligned with Vision 2030. This is the state, in corporate clothing, getting deals documented in a way banks and contractors can actually work with.

The Capital Stack: Who Pays for the Party (and Who Holds the Hangover)

Qiddiya’s funding is layered. Not a magic pot of cash – more a deliberate stack of who takes the risk at each stage.

Layer 1: PIF equity – the “we’ll go first” money

At the top sits the Public Investment Fund (PIF), putting in the equity. That’s the bit that takes the first hit if costs explode, timelines slip, or visitor numbers end up closer to “midweek museum” than “Orlando in July”.

A useful reminder: PIF isn’t a Scrooge McDuck-style vault of limitless cash. It’s also a borrower – raising money through conventional bonds and Sharia-compliant sukuk for its wider programme. Meaning it has its own funding costs and investors to keep happy.

Why PIF is still doing most of it (for now)

Because the early risks are exactly the ones private capital hates:

• The “it’s mostly a masterplan” phase.
• The “build it and they’ll come” phase.
• The “artist’s impression doing all the heavy lifting” phase.

So, at this stage, Qiddiya is still largely a PIF-backed bet.

Layer 2 (later): Asset-level debt – once bits become bankable

The long-term plan is different. As individual components become real assets with real contracts – the rail link, utilities, district cooling, venues with ticketed revenues – they can be financed like normal infrastructure.

That’s when you start to see banks and long-term lenders step in underneath PIF equity. The trick is to move from “sovereign ambition” to “contract-backed cashflow”.

Banks Don’t Fund Dreams – They Fund Contracts

Banks are simple creatures. They don’t finance ambition. They finance paperwork that can be enforced and a predictable cashflow.

So, when Qiddiya finances an asset like the planned high-speed rail link, the structure starts to look like classic project finance, often via a PPP-style concession: private groups bid to finance, build and operate, then get paid under a long-term deal.

Lenders tend to obsess over three questions:

1) How does it get paid?

It usually comes down to what the revenue model is: availability payments (the government pays as long as the rail line works), user fees (tickets/charges), or a mix. That choice tells you who carries the “what if nobody shows up?” risk

2) What happens if the operator messes up?

If the operator starts failing, lenders want the right to step in before the project is scuppered. That usually means security over the project company and the key contracts, so they have leverage if payments stop or obligations aren’t met. It also means step-in rights to replace the operator, and often assignment of receivables and key contracts so cashflows keep moving while things are fixed.

3) What support comes from the government?

Guarantees, termination payments, and sometimes foreign exchange protection. Often the difference between “lovely concept” and “fine, we’ll lend”.

Big picture: keep control at the top (PIF/QIC) but fund each piece on its own terms once it has contracts and a revenue engine.

Islamic Finance: The Sharia-Compliant Bit That Actually Matters

Islamic finance shows up here because Saudi Arabia wants to be a serious hub for it – and mega-projects produce exactly the sort of long-dated, asset-backed cashflows that suit Sharia-compliant investors.

Two common structures:

• Sukuk al-ijarah (lease-based sukuk). Instead of “interest”, investors receive lease payments. Typically an SPV owns (or is treated as owning) an asset and leases it back. Economically it behaves like a bond, but legally it’s rent.
• Musharakah (partnership structures). This is the “we’re in it together” version: investors and QIC (or a project company) share profits from a joint venture – for example, a hotel or residential cluster – according to agreed ratios.

Why this matters: once assets are running, Qiddiya can refinance them – potentially via sukuk – and recycle the proceeds into the next phase. Build it, stabilise it, refinance it, repeat.

Private Developers and PPP Contracts: The Bit That Stops It Turning into a Legal Soap Opera

The closer you get to the consumer (hotels, retail, residential, specialist attractions), the more the capital starts to look familiar. Private developers and private equity tend to show up, because the risks are easier to price and the revenues are easier to recognise.

They usually come in via:

• Long-term land leases.
• Joint ventures with QIC.
• Concession-style arrangements (build/operate/share revenues).

But the real value is in the paperwork – because these deals only work if they settle, up front, the questions everyone will otherwise fight about later:

• Who pays if construction overruns?

• Who carries operating risk if demand dips?
• What if a policy change shifts the economics?
• And if the relationship ends, what happens on termination – and who owes who what?

It’s not romantic, but it’s how you avoid “strategic partnership” turning into a slow-motion legal thriller.

Can the Numbers Ever Add Up?

This is the bit the capital stack can’t solve on its own: people have to turn up and spend money, and Qiddiya’s model relies heavily on visitor spending. Official projections talk about a wave of new jobs and the billions of dollars in GDP impact once the full city is built. And that’s fine.But project finance translates all of that into brutally practical questions:

• At what ticket prices and hotel occupancy do the assets comfortably cover their debt payments?
• How sensitive is demand if the economy slows – or if regional competitors start discounting?
• And how much downside can be pushed to private partners before they decide the return isn’t worth the grief?

This is the point where giga-projects either become investable platforms… or become extremely impressive places you visit once, take photos, and tick off the list.

The Last Word

Falcon’s Flight is the flashy bit – the part you can film, post, and argue about in the group chat (“absolutely never again”, versus “I’d do it twice”).

But the real test for Qiddiya isn’t whether the rollercoaster hits a record speed. It’s whether the whole place can keep turning big, expensive ideas into things that actually earn their keep – steadily, predictably, and at a scale that justifies the bill.

If the visitors come, the shops trade, the hotels fill up and the infrastructure behaves, Qiddiya starts to look like a grown-up business funded in increasingly grown-up ways.

If not, you end up with the world’s most expensive lesson in a very old truth: you can securitise cashflows – but you can’t securitise enthusiasm.

And in modern mega-projects, the scariest ride is rarely the one with the steepest drop. It’s the one on the balance sheet.