Home GCC Saudi Arabia Saudi Arabia’s NEOM secures $2.7bn syndicated loan The facility will support NEOM’s short-term financing requirements as it advances the development of major projects such as THE LINE by Kudakwashe Muzoriwa April 29, 2024 Image credit: Bloomberg/ Contributor/ Getty images Saudi Arabia’s NEOM, a unit of the Public Investment Fund, has secured a new revolving credit facility worth $2.67bn (SAR10bn) from a consortium of local lenders. The facility will support NEOM’s short-term financing requirements as it advances the development of major projects such as THE LINE. “As NEOM continues to gather pace, this new credit facility, backed by Saudi Arabia’s leading financial institutions, is a natural fit within our wider strategy for funding. We continue to explore a variety of funding sources as we deliver transformational infrastructure assets while supporting the wider Vision 2030 program,” said Nadhmi Al-Nasr, the CEO of NEOM. Saudi National Bank, Riyad Bank, and Saudi Awwal Bank acted as the lead arrangers on the new facility while other participant banks are Al Rajhi Bank, Alinma Bank, Arab National Bank, Bank Albilad, The Saudi Investment Bank, and Bank AlJazira, the company said in a statement. The new revolving credit facility follows the SAR23bn agreement signed by NEOM and its partners to finance the NEOM Green Hydrogen Company in May 2023. The planned mega-city also said the facility follows last year’s SAR3bn debt financing arranged to partially fund NEOM’s development of Sindalah, the luxury island destination set to welcome visitors this year. Last June, NEOM also secured SAR21bn in financing and finalised contracts to develop the first phase of housing expansion for its workforce. The megaproject is expected to have the capacity for 450,000 people by 2026 and 1.5-2 million people by 2030, eventually housing nine million by 2045. Financing NEOM Meanwhile, NEOM is reportedly considering its first riyal-denominated bond sale as the desert development looks for more sources of funding for the $1.5tn worth of construction projects planned for the futuristic city. Last July, Saudi Arabia’s Crown Prince and Prime Minister Mohammed bin Salman said the $500bn futuristic city will be partly financed through a flotation expected this year. However, Saudi Arabia has scaled back its medium-term ambitions for desert development, according to a report by Bloomberg. The kingdom expected to have 1.5 million residents living in The LINE by 2030, but now officials expect the development to house fewer than 300,000 residents by that time. Saudi Arabia’s finance minister Mohammed Al Jadaan said the kingdom would adjust its Vision 2030 plan to transform its economy as needed, scaling back some projects and accelerating others. Speaking at the World Economic Forum’s special meeting on Global Collaboration, Growth and Energy for Development in Riyadh, Al Jadaan said Saudi Arabia’s focus is on ensuring the quality of future economic growth and recognises that the challenges it faces require flexibility. “There are challenges… we don’t have ego, we will change course, we will adjust, we will extend some of the projects, we will downscale some of the projects, we will accelerate some of the projects,” he said. Read: NEOM reportedly considers debut riyal bond sale to fund projects Tags NEOM Saudi Arabia Saudi National Bank The Line Vision 2030 You might also like NielsenIQ H1 report reveals region’s split shopper preferences Saudi Arabia sees Italy as partner of choice on green products Fourth Milling Company to float IPO on Tadawul Saudi Arabia scraps hotel licencing fees in bid to boost tourism