- NEOM plans to raise SAR 5 billion through its inaugural sukuk sale to support $1.5 trillion construction projects.
- HSBC Holdings, Al Rajhi Bank, and Saudi National Bank will facilitate the sukuk sale, expected in the latter half of the year.
- NEOM’s revised plans include scaling back The Line development to house less than 300,000 residents by 2030 and implementing it in stages, aligning with Saudi Arabia’s objectives.
NEOM, Saudi Arabia’s ambitious megaproject, is gearing up to launch its inaugural Saudi riyal Islamic bond (sukuk) sale this year.
Bloomberg sources suggest that the goal is to raise up to SAR 5 billion ($1.3 billion) to support the vast array of construction projects planned for the futuristic city. These projects are valued at an impressive $1.5 trillion.
To facilitate the sukuk sale, NEOM has engaged banks like HSBC Holdings, as well as the securities units of Al Rajhi Bank and Saudi National Bank.
These financial institutions will guide and support the fundraising process. Bloomberg reports that the sukuk sale is anticipated to take place in the latter half of the year, with the timing and size of the offering dependent on prevailing market conditions.
This move underscores NEOM’s commitment to securing the necessary financial resources to realize its ambitious vision of creating a cutting-edge, sustainable city of the future.
Issuing sukuk aligns with Saudi Arabia’s broader efforts to diversify its economy and attract investment in strategic sectors. NEOM is positioned as a key driver of economic growth and innovation in the region.
NEOM recently secured a substantial SAR 10 billion loan from a consortium of Saudi banks. Additionally, SAR 3 billion was raised to support Sindalah, a luxurious tourism island located off the Red Sea. However, recent reports from Bloomberg indicate a shift in Saudi Arabia’s mid-term objectives for NEOM.
According to Bloomberg, Saudi Arabia has revised the ambitious plans for The Line development within NEOM. The original vision, which aimed to accommodate 1.5 million residents by 2030, now expects to house less than 300,000 people. This drastic reduction in population projection is accompanied by changes in the development’s scale and timeline.
The Line, spanning 170 kilometers and designed as a zero-carbon urban development, will now be implemented in stages. By 2030, only a fraction of it, approximately 2.4 kilometers, is slated for completion.
This scaling back reflects adjustments in the project’s scope and pace of development, aligning with the revised objectives set forth by Saudi Arabia.
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Last Updated on April 18, 2024 by Safiya K
