- Saudi Arabia’s Neom futuristic city estimated to costs in excess of $8.8 trillion.
- Neom features a floating industrial complex, global trade hub, tourist resorts.
- The city, which is powered by 100% renewable energy, is plagued by delays and cost overruns.
Neom, an ambitious fusion of architecture and ecology, is a futuristic city under construction in Saudi Arabia’s Tabuk Province. Touted as an unprecedented mega-investment, it serves as a case study for policymakers in Africa, highlighting both the opportunities and challenges of large-scale urban development.
According to a recent statement from Neom’s management, the project is set for completion by 2039. The name “Neom” blends the Ancient Greek prefix neo- (meaning “new”) with Mostaqbal, the Arabic word for “future.”
With an estimated cost exceeding $8.8 trillion—over 25 times Saudi Arabia’s annual budget—the new city is among the world’s most ambitious urban projects. Launched in 2017, it spans 26,500 km² and features a floating industrial complex, a global trade hub, luxury tourist resorts, and a linear city powered entirely by renewable energy.
The project is envisioned to create some 460,000 jobs and contribute an estimated $48 billion to the country’s GDP. According to the update, the project is financed by a $500 billion investment from the Public Investment Fund of the Kingdom of Saudi Arabia.
It is also supported through an Export Credit Agency (ECA) financing transaction, with Italy’s SACE, which has pledged approximately $3 billion under a long-term multicurrency untied facility, the report reveals.
The report says the project is also backed by a syndicate of nine prominent international banks including HSBC, Banco Bilbao Vizcaya Argentaria, Bank of China, Crédit Agricole CIB, Agricultural Bank among others.
“Neom is committed to working with global partners who share our passion for visionary projects and initiatives that will advance human progress, said the project’s acting CEO, Eng. Aiman Al-Mudaifer.
Even though the project is now said to be an investment risk, but all business are, there are key lessons that can help African policy makers develop the tourism industry in their countries. Other than the long term visionary planning, the project is already having numerous direct benefits to the community.
Neom community works and CSR
Described as one of the most sustainable giga-project in the north-west of the Kingdom of Saudi Arabia, the futuristic investment has won the Princess Seetah bint Abdulaziz Award for Excellence in Social Work. The award was given in honour of “its outstanding social responsibility contributions,” the press release said.
Titled: ‘Excellence in Corporate Social Responsibility for For-Profit Entities,’ the award was given in recognition of ‘NEOM’s concerted efforts in promoting social responsibility values and delivering innovative initiatives that contribute to community development,’ reads the report in part.
Presenting the award, His Excellency Ahmed bin Sulaiman Al-Rajhi, Minister of Human Resources and Social Development, said among the Neom Social Responsibility (SR) initiatives that led to Neom receiving the award was its ‘Neom Seven Senses.’
He said through this program, the ambitious city engages entrepreneurs and has assisted more than of 2,390 small- and medium-sized enterprises and individuals with resources, training and mentorship.
Another program that led to the award is ‘NEOM Friends’ program that has assisted a whopping 83,266 beneficiaries in healthcare, social development, environmental, education, sport, entrepreneurship, energy, safety and financial awareness.
It was also recognized for granting of educational opportunities to 732 students who have been given national and international scholarships.
Another act of responsible citizenry role by the city is its ‘Career Counseling Program’ that comprises workshops, Career Path Training and, a Social Employment Platform, the NEOM Partners Job Fair.
While African countries are setting up major investment projects including business parks, agricultural development corridors and mining ventures, it still lacks in meaningful push for social responsibility works that would result in tangible community development as the Neom project has done.
Then there is Neom’s sustainability policy and it’s use of renewable energy to protect the environment. According to media report, Neom is powered by 100 per cent renewable energy and prioritizes people and nature.
“Neom creates a new model for sustainable living, working and prospering. It is a place where humanity can progress without compromising the health of the planet,” reads the report.
Neom’s major projects
The Line is a signature project at Neom. It is a revolutionary concept in urban living that prioritizes people and nature, creating a new urban sustainability model based entirely on renewable energy, the report describes. “In line with the Kingdom’s sustainability goals, the linear city conserves 95 per cent of its land as a nature reserve,” the report details.
Then you have the Oxagon, which the report describes as; ” A floating industrial city under development in the southwest corner of NEOM.” Oxagon is strategically located on the coast of the Red Sea, notably, this is where 13 per cent of the world’s trade passes, the city includes an integrated port, a logistics center and manufacturing facilities.
“Sitting at the crossroads of three continents, Oxagon is place where people, nature and technology come together in harmony,” it adds.
Another major attraction is the Trojena, that the report describes as a new destination for sustainable mountain tourism. “It is a place where nature, architecture and technology come together to offer world-class experiences and host unique festivals and events, such as the 2029 Asian Winter Games,” the report reveals.
Imagine that, ‘winter games’ will be held in a desert country, that is visionary investment indeed that Africa can learn from.
Finally you have Sindalah, a key attraction at the mega city that is designed as a premier luxury destination for island and yacht enthusiasts. “An alluring tourism spot, it serves as a gateway to the Red Sea, while preserving its diverse marine ecosystems,” the report concludes.
Also read: Trump cuts: Africa does not want aid, it needs debt relief
Neom: A financial sinkhole?
However, this futuristic project is hot without challenges, something not new across economies in Africa. According to the Wall Street Journal (WSJ), “Saudi Arabia’s now eight-year-old Neom project — a futuristic, carbon-neutral, 105-mile-long linear city envisioned by Crown Prince Mohammed bin Salman — has become a financial sinkhole.”
The report says the project is “plagued by delays and cost overruns.” It cites the fact that Saudi Arabia has already spent $50 billion and “could reportedly face another 55 years of construction, with an astonishing projected cost of $8.8 trillion, according to an internal audit presented to Neom’s board last summer.”
“Among the harsh realities threatening to derail the project are insufficient labour, inadequate roads, and a lack of electricity,” WSJ adds.
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