Saudi Arabia plans to list its flagship mega-project Neom by 2024, as the kingdom seeks to diversify its economy from oil, attract more foreign investment and boost the liquidity of its stock market.
The initial public offering could add one trillion Saudi riyals ($266 billion) to the size of the kingdom's capital market, Saudi Arabia's Crown Prince Mohammed bin Salman said, state-owned Al-Ekhbariya TV reported.
The Neom listing could add at least 1.2 trillion riyals to the market value in the beginning and the total will increase after project completion to reach more than five trillion riyals, he said on Monday night.
Unveiled by the crown prince in 2017, Neom is Saudi Arabia's flagship business and tourism development on the Red Sea coast and a central project in the 2030 Vision outlining the kingdom's plans to diversify the economy.
The development will include smart towns and cities, ports and enterprise areas, research centres, sports and entertainment venues and tourist attractions.
Spread across 26,500 square kilometres, it will comprise several zones, including industrial and logistics areas, all planned for completion in 2025.
The crown prince also outlined plans for funding the $500bn mega project Neom.
The first phase of the futuristic city on the Red Sea coast will cost about 1.2 trillion riyals through to 2030, he said.
About half of this, or 600bn riyals, will be covered by the kingdom's sovereign wealth fund, the Public Investment Fund (PIF).
The remaining amount will be raised from other sovereign wealth funds, private sector investors and the IPO that is planned for 2024.
Saudi Arabia will also earmark 300bn riyals, which could increase to 400bn riyals, for an investment fund related to Neom, the crown prince said.
This fund will invest in companies that are going to operate within Neom.
The crown prince also said that the government will raise 500bn riyals of capital in 2027 and tap the market for an additional 200bn to 300bn riyals for Neom.
Neom's internal rate of return (IRR), a metric used in financial analysis to estimate the profitability of potential investments, is still under study and will range between 9 per cent to 16 per cent, he said.
The prince was speaking to reporters after a press conference revealing details of The Line, to be located in Neom, that will "embody how urban communities will be in the future".
The Line is a record-setting skyscraper, 170 kilometres long and consisting of two buildings up to 500 metres tall. The project is designed by the US-based Morphosis Architects and it involves at least nine other design and engineering consultancies.
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Trojena will open in 2026 as part of Saudi Arabia's megacity of the future. Photo: Neom -
Trojena is designed to attract visitors, holidaymakers and winter sports enthusiasts from around the world. PA -
The design plan for Trojena, an area in Saudi Arabia's planned megacity of Neom chosen to host the 2029 Asian Winter Games. AFP -
The Line is also being built at Neom. It will be free of cars and streets and have zero carbon emissions. Photo: Neom -
Neom chief executive Nadhmi Al Nasr said The Line would make use of artificial intelligence technology to the fullest. Photo: Neom -
Neom city will be powered by clean energy, officials say. Photo: Neom -
Trojena in Neom will host the first outdoor snow skiing destination in the GCC region. Photo: Neom -
Neom lies in a desert bordering the Red Sea in Saudi Arabia. Reuters -
Architects say Neom will be designed to make the most of its environmental surroundings. Photo: Neom -
Andrew McEvoy, sector head for tourism at Neom, at Arabian Travel Market held at Dubai World Trade Centre. Pawan Singh / The National -
The $500bn Neom project in the Tabuk Province of north-western Saudi Arabia is supported by the kingdom's Public Investment Fund. Photo: Saudi Commission for Tourism and Natural Heritage
