Saudi Crown Prince Mohammed bin Salman announced on the sidelines of the Future Investment Initiative conference arranged by Saudi Arabia’s main sovereign wealth fund, the Public Investment Fund (PIF) that has attracted nearly 4,000 delegates from around the world to Riyadh last week, the building of NEOM, a a new city tech hub 26,500-square km (10,230-square mile) zone that will extend into Jordan and Egypt.
The $500 billion mega-city planned by Saudi Arabia will be floated on financial markets as a futuristic high tech hub looks set to become a flagship of reforms championed by Prince Mohammed to create jobs, encourage entrepreneurs and permit new freedoms among Saudis steeped in religious puritanism and dependence on the state. “The first capitalist city in the world … this is the unique thing that will be revolutionary,” said Prince Mohammed. “Without a doubt, at the end of the day NEOM will be floated in the markets. The first zone floated in the public markets. It’s as if you float the city of New York.” Adjacent to the Red Sea and the Gulf of Aqaba and near maritime trade routes that use the Suez Canal, the zone will serve as a gateway to the proposed King Salman Bridge, which will link Egypt and Saudi Arabia. NEOM, will focus on industries including energy and water, biotechnology, food, advanced manufacturing and entertainment. NEOM’s strategic location will facilitate the zone’s rapid emergence as a global hub that connects Asia, Europe and Africa with its own tax and labour laws and an autonomous judicial system, and to power itself solely with wind power and solar energy.
NEOM will be fully owned by Saudi Arabia’s sovereign Public Investment Fund (PIF) until its listing, and will attract investments from companies in renewable energy, biotechnology, advanced manufacturing and entertainment, the PIF has said. “It won’t be listed in the markets until the idea is mature enough,” Prince Mohammed said. “It might be after 2030, it might be before, but the idea and the strategy is to float it eventually.” The new city will not follow the rules and regulations enforced in the rest of Saudi Arabia. It will offer residents a more liberal lifestyle, allowing musical concerts and entertainment. Prince Mohammed said the name mixed “neo”, meaning new, with M, the first letter of the Arabic word for future. The new city is part of the crown prince’s ambitious Vision 2030 plan to overhaul the economy of Saudi Arabia, OPEC’s largest producer, and provide jobs for the increasing younger population in the face of a global oil price decline since 2014.
Prince Mohammed added that “We have a lot of huge projects we will announce in the next few years.” He said PIF would generate higher returns than other big investment funds. On Aramco’s IPO, he said: “We are on track in 2018… but the listing (details) are still under discussion … It will be IPO-ed in 2018.”