Days before Saudi Arabia kicks off its flagship investment conference, a handpicked selection of guests will get the first glimpse of Crown Prince Mohammed bin Salman’s trillion-dollar bet that the kingdom has a future beyond oil.
An exclusive group of financiers, entertainers and influencers from around the world will this week descend upon Sindalah Island, the first project to open its doors at the planned city of Neom. The resort is now home to ultra-luxury hotels and unspoilt beaches, plus an 86-berth marina where the uber rich can dock their yachts and dive into the crystal clear waters of the Red Sea.
A lot is riding on the success of Sindalah and the wider area in the kingdom’s northwest that’s been re-branded as Neom and is expected to cost anywhere from $500 billion to $1.5 trillion to build — Crown Prince Mohammed’s boldest move yet. The opening comes days before the kingdom kicks off the eighth edition of its Future Investment Initiative, a Davos-style confab.
“There is still considerable effort to go in partnerships and investment, so timing with FII would make sense,” said Karen Young, a senior research scholar at Columbia University’s Center on Global Energy Policy. “If investors see some major infrastructure in place for power, water, transport, that would do a lot to instill confidence about government commitment to major installations in Neom.”
Designed to be everything from a futuristic port, a high-end tourist destination and a clean-energy hub to a venue for the FIFA World Cup and the Asian Winter Games, Neom has never been short of ambition.
It was to be the city of the future that sought to “revolutionize everyday life.” Not just a chance to reshape Saudi cities — replacing oil-burning power plants that belch carbon dioxide with renewable energy plants — but a bold promise to re-imagine how cities globally should look and function.
Yet, its development has been plagued by challenges related to transforming Crown Prince Mohammed’s vision into reality. Foreign investors have been slow to back the plans and the outlook for state coffers has been weaker than expected just a few years ago, with oil trading well below $100. As a result, budgets have been cut and development on some parts of the project has been delayed.
This story is based on interviews with over half a dozen people close to the project, who asked not to be identified as the information is private.
“These ambitious projects are big gambles,” said Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute in Washington. “My sense is that the Saudi government is prepared to shoulder the main financing burden for many giga-projects over the short term, with greater private-sector and foreign investment anticipated to materialize over the medium and long terms.”
In a statement, a spokesperson for Neom said that all of its five regions are “under active development.”
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