Saudi Arabia’s Neom Project Plans to Raise $1.3 Billion through Sukuk Bonds to Fund Futuristic City Development

The Neom project, led by Crown Prince Mohammed bin Salman as part of Saudi Arabia’s Vision 2030, is set to issue its first bonds, potentially raising up to $1.3 billion to fund its development.

The Neom project, with an estimated cost of $500 billion, is looking to sell Islamic bonds, known as sukuk, to raise funds. It is part of Saudi Arabia’s efforts to diversify its economy away from oil and into other sectors, including technology.

The centerpiece of the Neom project is The Line, a futuristic city within mirrored skyscrapers that aims to be sustainable and emissions-free. Other elements of the Neom project include a sustainable port on the Red Sea, a ski and adventure resort, and a luxury island called Sindalha.

Despite most of the funding coming from Saudi Arabia’s sovereign wealth fund, PIF, there are concerns about rising costs and the need for additional funding to fully realize the ambitions of Vision 2030. The project has started borrowing to finance its development, reflecting the challenges of executing such large-scale projects.