Saudi Arabia will allocate 300 billion riyals, about 80 billion dollars, to an investment fund established for Prince Bin Salman’s huge project – the desert city of Neom. For this, the prince is planning an initial offering of the project on the kingdom’s stock exchange as early as 2024. Bin Salman told reporters that the Neom investment fund may expand to 400 billion riyals, and will invest in companies that agree to operate in the huge metropolis that is planned in the northwest of Saudi Arabia on the coast of the Red Sea.
The prince’s announcement on Monday was attended by global investors, including Bridgewater Associates founder Ray Dalio, Ripplewood’s Tim Collins, Saudi Prince Al-Waleed bin Talal and Kuwaiti retail billionaire Mohammed Al-Shea. For the first time, the Crown Prince described how he plans to finance Neom – one of the largest and most complex construction initiatives in the world.
The first phase of the project, which will last until 2030, will cost 1.2 trillion riyals, about 320 billion dollars, with about half of that covered by the Public Investment Fund (PIF), according to the prince.
Officials will seek to raise another 600 billion riyals from other sovereign wealth funds in the region, private investors in Saudi Arabia and abroad, and an initial public offering of Neom itself on the Saudi Stock Exchange. the prince said, “We have big goals to bring Saudi Arabia to be among the three largest stock markets in the world.”
The plan to build Neom, announced in 2017, is Prince Mohammed’s ambition to turn a desert area the size of Belgium into a Saudi high-tech metropolis. He pitched it as a testbed for new technologies that could revolutionize urban life — as well as a way to attract foreign investment and diversify Saudi Arabia’s now oil-dependent economy. However, five years later, the ambitious project has suffered setbacks, many of them stemming from the difficulties in implementing the prince’s big and ever-changing ideas, according to current and former employees.
The Prince’s latest announcement was a plan to build twin buildings, spanning more than 100 kilometers that would house an entire city of 9 million people. When asked why he wanted to build Neom, he told reporters that his plan to modernize Saudi Arabia involves increasing its population from about 34 million people today to 50-60 million by 2030. Half of them will be foreigners, he added, compared to the kingdom’s current demographic balance, about one-third foreigners and two A third are Saudi citizens. The capital Riyadh would be too crowded if it expanded too much, the prince said, but “Neom will take care of 10 million.” By 2030, he aims for 1.5 million people to live “inside the line” – the twin buildings – and by 2045, 9 million.
The prince also added that the kingdom plans to invest in neighboring Egypt to complete the project, including in the tourist area of Sharm el-Sheikh, which is across the Red Sea from Neom. “We are going to create huge investments in Egypt.”