Giga-projects Neom raises $24 billion from the private sector By Andrew Hammond October 30, 2024, 4:52 PM FII Neom deputy CEO Rayan Fayez said there was a "very good appetite from the private sector" to help fund the giga-project Moving away from state cash ‘Very good appetite’ Projects have been delayed The Saudi giga-project Neom has secured SAR60 billion ($16 billion) in private sector funding and SAR30 billion ($8 billion) in loans as it tries to move away from reliance on government cash. The revelation was made by deputy CEO Rayan Fayez to the Future Investment Initiative forum in Riyadh on Wednesday. Fayez said: “What we’ve seen recently, in the last 18 to 24 months, is a significant amount of private sector capital coming in.” The sums totalled more than 60 billion riyals of private sector commitments and more than 30 billion riyals of debt funding across Neom and the various projects, “and more to come”, Fayez said. “With these commercial assets becoming a lot more visible, we’re seeing a very good appetite from the private sector to co-fund and co-invest in the journey,” he said. Neom “will not work with the government funding alone, and there was never the intention. The intention has always been for the government to kick start it,” Fayez said. Valued at around $500 billion, Neom is the centrepiece of Saudi Arabia’s giga-projects, which aim to diversify the country’s economy away from a reliance on oil. The giga-projects are designed to transform a once closed, conservative country into a global leader in green technology and artificial intelligence. However, Neom has faced delays because of funding problems stemming from slipping global oil prices over the past two years, a government focus on Riyadh-based projects and disappointing numbers in foreign direct investment. The Public Investment Fund, Neom’s government owner, said this week it plans to reduce its foreign investments to around a fifth of its total assets under management, as it focuses on domestic funding as well as artificial intelligence projects. Still, Neom’s various projects, including the desert city The Line, the winter resort Trojena, the industrial city Oxagon and the Magna tourism resorts, are currently using up one-fifth of all the steel produced in the world, a Neom official said earlier this month. Last week, Neom welcomed visitors to its first project, the tourist island of Sindalah. Fayez said investors could rest assured that Neom was using government money to complete its infrastructure and now widen its funding sources. FII’s Richard Attias: ‘I feel more welcome here than in France’ Frank Kane: The elephant in the FII Plenary Hall is the US election Neom-backed robotaxi operator Pony Ai files for US IPO “A significant part of the funding is through the PIF as its only shareholder and the ministry of finance. But what that does is invest in the infrastructure using government’s capital and derisks the project to come in,” he said at the FII8 event. Global finance leaders, tech entrepreneurs and politicians are meeting this week in the shadow of the Iran-Israel conflict and war in Gaza and Lebanon, and a US election on November 5 that could return former president Donald Trump to power. Saudi officials have presented Saudi Arabia and the Gulf region as an oasis of stability with a mission to help Global South countries and act as a “super connector” for new technologies being developed around the world, such as AI. Neom forms a large territory in Saudi Arabia’s north-west region on the Gulf of Aqaba next to Jordan, Egypt and Israel. Fayez said, “Although it’s physically located in the kingdom, the ambition is to transcend the kingdom’s borders.”