Saudi Arabia pitching NEOM as a ‘generational investment’

Saudi Arabia is inviting the world to invest in its sprawling trillion-dollar NEOM megaproject and advising potential backers to ignore the recent bumps along the road.

“The flywheel is starting and it will gain speed as we go forward, as some of the foundational assets come to the market,” Saudi Investment Minister Khalid Al-Falih told Reuters this week on the sidelines of the World Investment Conference in Riyadh.

The development in western Saudi Arabia – which features a 100-mile long vertical city, ski slopes and beach resorts – is the centerpiece of Crown Prince Mohammed bin Salman’s Vision 2030 plan to overhaul the economy and wean it off dependence on the kingdom’s vast oil revenues. The Public Investment Fund, which owns NEOM, announced that the project’s longtime CEO stepped down this month while it has had to delay some of the project’s target completion dates.

Al-Falih says to be patient. “NEOM was not meant to be a two-year investable opportunity,” he told the news agency. “If anybody expected NEOM to be a foreign investment in two, three or five years, then they have gotten (it) wrong – it’s a generational investment.”

Asked if most of the spending on NEOM will continue to come from the PIF, Al-Falih said funds from abroad are expected to increase.

“I think foreign investors are starting to come to NEOM – they’re starting to channel capital,” he said. “Some of the projects that the PIF will be doing will be financed through global capital pools, through some alternative and private capital. That’s taking place as we speak.”