Saudi Arabia's NEOM attracts $16B in private financing over 2 years

Introduction

Saudi Arabia’s NEOM project has attracted $16 billion in private financing over 2 years. In fact, the project has seen significant financial challenges and a lack of substantial private investment in the NEOM project.

Here are the key points:

1. NEOM has struggled to attract foreign investment, contrary to initial expectations.

2. The Saudi Public Investment Fund (PIF) has taken on the majority of the financial burden for NEOM.

3. Saudi Arabia has recently sought loans from neighboring countries, including a request to Kuwait for over $16 billion to fund NEOM and other projects.

4. The project has faced financial setbacks, with costs potentially doubling from the initial $500 billion estimate to up to $1 trillion by 2050.

5. In February 2024, Saudi Arabia began borrowing to help fund some of its ambitious megaprojects, including NEOM.

6. The project has secured some financing, such as a SAR 10 billion (approximately $2.67 billion) revolving credit facility from Saudi banks, but this is not private international investment.

Conclusion

Given these points, it appears that NEOM has not attracted significant private international financing and is primarily funded by Saudi government entities. ThSaudi Arabia's NEOM initiative has successfully secured $16 billion in private financing over the past two years. However, the project has encountered notable financial challenges and a shortfall in substantial private investment.