Neom Hosts Show-and-Tell for Bankers as It Scours for More Cash

Hundreds of bankers will descend on Saudi Arabia’s Neom this week as developers for the futuristic city continue their hunt for new forms of funding. 

Neom’s Chief Executive Officer Nadhmi Al-Nasr will host the cadre of financiers along with other top government officials، according to people familiar with the matter. Al-Nasr plans to showcase progress made on the development’s marquee project، called The Line، the people said، asking not to be named discussing plans for the non-public event. 

The gathering is aimed at stimulating interest among bankers by displaying the actual work happening inside Neom rather than relying on the virtual reality videos that developers have previously trotted out when they’ve met with financiers in places like New York and London، the people said.

A representative for Neom declined to comment. 

Neom is the crown jewel of Crown Prince Mohammed bin Salman’s wide-ranging program to overhaul the economy of the world’s top oil exporter. 

Renderings for the project have included a car-free linear city، an industrial development that floats on the Red Sea and a mountain ski resort with an artificial lake — all powered by renewable energy and requiring $1.5 trillion worth of construction projects.  

Funding Search

The Line — a pair of mirror-clad skyscrapers that the kingdom hopes will ultimately stretch 170 kilometers — is at the heart of the development. 

The search for funding comes as Saudi Arabia recently scaled back its medium-term ambition for the project. While the government at one point hoped to have 1.5 million residents living in The Line by 2030، it now expects the development will house fewer than 300،000 residents by that time. 

So far، some foreign banks have been hesitant to provide major loans to Neom because Saudi Arabia hasn’t yet given the project a government guarantee، the people familiar with the matter said. 

Most of Neom’s funding so far has come in the form of equity injections from its owner، Saudi Arabia’s sovereign wealth fund، which is led by Crown Prince Mohammed. But the city’s developers have appointed banks to advise them on its debut riyal bond sale that could raise as much as 5 billion riyals ($1.33 billion)، Bloomberg News has reported.  

Neom recently secured a 10 billion-riyals loan from a group of Saudi banks and the project’s developers have also raised a 3 billion-riyal loan to finance Sindalah، a luxury tourism island in the Red Sea.

The kingdom has long said the Vision 2030 plans would be funded by in part by overseas money and it’s hoping to hit $100 billion of foreign direct investment annually by 2030، a haul roughly three times bigger than it has ever achieved. 

Investor Meetings

Neom executives also recently traveled across China to meet with potential investors. The tour began in Beijing and was followed by meetings in Shanghai.

“Collaboration with China will continue to play a vital role in the development of NEOM and we look forward strengthening our engagement with the country’s business community،” Al-Nasr said in a statement last week. Neom’s developers also recently gauged investor interest in cities including Seoul، Washington DC، Miami and Paris.

Neom has hosted bankers on its shores in the past، though those meetings often involved just one or two bankers from a single institution. This week’s affair will be the first time the city hosts a larger group of financiers from multiple institutions all at once. 

In addition to showcasing the progress made on The Line، the city’s developers will also offer tours of Sindalah and Oxagon، a floating port city inside Neom، according to one of the people familiar with the matter. 

Officials will also take the bankers on a tour of The Line’s Hidden Marina، according to a copy of the event’s agenda seen by Bloomberg. Participants will be able to depart on VIP jets from Neom Bay Airport، according to the document.

Earlier this month، the kingdom invited representatives from more than 100 construction companies to the development as part of a two-day gathering. The development، which already employs 140،000 construction workers، expects that workforce to top 200،000 by next year، according to a statement.