Neom - Line
The design for the 500-metre tall parallel structures, known collectively as The Line, in the heart of the Red Sea megacity Neom. The futuristic megacity in Saudi Arabia will feature two massive, mirror-encased skyscrapers that extend over 170 kilometres of desert and mountain terrain, ultimately housing nine million people. Image Credit: AFP

Riyadh: Saudi Arabia’s Neom, the company developing Crown Prince Mohammed bin Salman’s flagship megaproject, is looking to raise a 10 billion riyal ($2.7 billion) loan, according to people familiar with the matter.

Neom, a unit of the kingdom’s sovereign wealth fund, is talking to a group of mostly local lenders to raise money to help fund early stages of the $500 billion project, the people said, asking not to be identified as the information is private. Banks are negotiating terms with Neom and, if agreed, the loan could be completed in the next few months, the people said.

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In addition, Neom is planning to raise up to 3 billion riyals from local banks to fund the development of Shushah Island, a luxury tourism development, the people said.

Neom declined to comment.

Spearheaded by the Crown Prince, Neom is the biggest project in his plan to diversify the country’s oil-dependent economy. He wants the city to transform Saudi Arabia’s economy and serve as a testbed for technologies that could revolutionize daily life.

Its developer has signed several deals this year to bring in investment into the project. Neom last month finalized a deal worth more than 21 billion riyals with a group of local investors to develop temporary housing and facilities for 95,000 people under a public-private partnership deal. Prior to that, it signed a 3 billion riyal loan with Riyad Bank to fund the development of an island-tourism resort called Sindalah.