Saudi Arabia’s Neom project, part of the Vision 2030 initiative led by Crown Prince Mohammed Bin Salman, is planning its first bond sale. Bloomberg reported that the issuance could potentially raise up to $1.3 billion and take place later this year. Neom, a $500 billion desert megacity, is seeking new funding sources for its massive development.
The sukuk issuance, involving the sale of Islamic bonds, could help fund Neom’s ambitious plans. The project aims to diversify Saudi Arabia’s economy away from oil and towards other sectors, including technology. Despite most of the funding coming from the country’s sovereign wealth fund, PIF, concerns around rising costs have caused delays in approving Neom’s budget for 2024.
Reports indicate that Saudi Arabia has started borrowing to support Neom and other Vision 2030 projects due to the immense scale and costs. Some estimates suggest that PIF may need to raise an additional $270 billion to fully realize its goals. One of the most well-known features of Neom is The Line, a futuristic city planned to operate entirely on renewable energy with no roads, cars, or emissions.
In addition to The Line, Neom developers have proposed building a sustainable port on the Red Sea, a ski and adventure resort, and a luxury island called Sindalha. The project has not yet provided further details or comments regarding the bond sale.