Saudi Arabia’s $500 billion ultra-high-tech future megacity, named NEOM, will be floated on financial markets alongside oil giant Saudi Aramco as part of the kingdom’s mechanism to rid itself from oil-dependency, the crown prince told Reuters in an interview late on Wednesday.
The 26,500-square km (10,230-square mile) business and industrial zone will sit on the intersection of three countries, Saudi Arabia, Jordan and Egypt. It was unveiled on Tuesday at a three-day international investment conference.
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.
The extraordinary announcement is the latest in a slate of privatization programs led by the floating of oil giant Saudi Aramco. The sales are designed to boost the Saudi economy and create jobs for millions of young people.
“The first capitalist city in the world... this is the unique thing that will be revolutionary,” Crown Prince Mohammed bin Salman said.
“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.”
The Crown Prince spoke on the sidelines of the Future Investment Initiative conference, which has attracted nearly 4,000 delegates from around the world to Riyadh this week.
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.”
He said the name mixed “neo”, meaning new, with M, the first letter of the Arabic word for future, or Neo-Mostaqbal; new 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 an overwhelmingly young population amid a global oil price decline since 2014.
“The idea is not to restructure the economy as much as to seize the opportunities available that we didn’t address before. We have high capacity and we use only a little.”
Prince Mohammed became next in line for the throne in June after the king. He has pledged to transform Saudi Arabia economically and socially.
“Vision 2030 is about a lot of big opportunities, so Aramco is one of them, NEOM another opportunity... 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.