Saudi Arabia will build a megacity called “NEOM,” will operate independently from the “existing governmental framework” with investors consulted at every step during development. The project will be backed by more than $500 billion from the Saudi government, its sovereign wealth fund and local and international investors, according to a statement released on Tuesday at an international business conference in Riyadh.
Prince Mohammed bin Salman wants to prepare Saudi Arabia for the post-oil era. In less than two years, Salman has revealed plans to sell a stake in oil giant Saudi Aramco and create the world’s largest sovereign wealth fund, and has ended a long-standing ban on female drivers.
* they will be powered with concentrated solar power
* they will vertical greenhouse farms
* they will have a biotech focus (stem cell, gene therapy and more)
* they will have a focus on AI, virtual and augmented reality
* they will be pushing 3D printing and other advanced manufacturing
They plan to partner with Egypt and Jordan.
Klaus Kleinfeld, the former chairman and chief executive officer of Siemens AG and Alcoa Inc., was appointed to lead the development of NEOM. SoftBank Group Corp.’s Vision Fund on Tuesday signed an initial agreement with the kingdom’s wealth fund to buy a “significant” stake in state-controlled Saudi Electricity Co., and will provide energy for the new city. Saudi Arabia this year agreed to become a cornerstone investor in the Vision Fund.
The NEOM project aims to develop nine key economic sectors for the future, in addition to the establishment of industries that curb economic leakage in the Kingdom and the region in general. This will be achieved through the establishment of development funds, that will support these sectors, identified as:
THE FUTURE OF ENERGY AND WATER: Includes being, fully powered by renewable energy, forward looking energy storage and transport solutions as well as R&D and manufacturing. In addition, utilizing green technology in building water capabilities and maximizing usage efficiency
THE FUTURE OF MOBILITY: Includes seaports, airports, autonomous transport solutions such as autonomous vehicles/drones, and others
THE FUTURE OF BIOTECH: Includes biotechnology, human biotechnology and pharmaceuticals manufacturing
THE FUTURE OF FOOD: Includes an international innovation center for food technologies, including seawater and desert farming, aeroponics and hydroponics
THE FUTURE OF ADVANCED MANUFACTURING: Includes new materials in composites and metals, 3D printing, robotics and vehicle manufacturing and much more
THE FUTURE OF MEDIA AND MEDIA PRODUCTION: Includes the development of the television and film industry, the video gaming industry and digital content
THE FUTURE OF ENTERTAINMENT: Includes facilities, activities, sporting and cultural entertainment events and others
THE FUTURE OF TECHNOLOGICAL AND DIGITAL SCIENCES: Includes artificial intelligence, virtual reality and augmented reality technologies, data centers, the Internet of Things and e-commerce
THE FUTURE OF LIVING AS NEOM’S FOUNDATION: Includes housing, education, security and safety, green spaces, healthcare, hospitality and hotels
One of the project’s main advantages is the redirection of the Kingdom’s economic leakage back to the country:
NET IMPORTS TO THE KINGDOM: The nine sectors outlined for development will return about $70 billion in revenue back into the Kingdom, by way of commodities currently imported from abroad, through the potential of local production of vehicles, machinery and communication equipment.
INVESTMENTS ABROAD: The project will provide new opportunities in previously non-existent sectors for Saudi Arabian investors, within an environment that adopts favorable business laws and a system conducive to growth. Thus, part of the investment leakage issue will be addressed.
SAUDI CONSUMERS OVERSEAS SPENDING: NEOM will offer a new local tourist destination for Saudi citizens to visit, while ensuring that their capital is injected back into the local economy.
NEOM will be back by more than $500 billion over the coming years by the Kingdom of Saudi Arabia, the Saudi Arabian Public Investment Fund, as well as local and international investors. NEOM’s contribution to the Kingdom’s GDP is projected to reach at least $100 billion by 2030, in addition to its per capita GDP – projected to become the highest in the world.