Since its first announcement in 2017, the Neom project has been a growing investment interest in Saudi Arabia. The mega green city development will establish a 105-mile-long belt called 'The Line' as a replacement for roads, removing the needs of cars and aiming for zero carbon emissions.
Saudi's government seeks to create a healthier and more sustainable environment powered by 100% renewable energy, face recognition technology, and 5G standard across the smart city.
Situated near the Red Sea, the project will intervene with 13% of global trade traffic and position itself as a strategic hub for 40% of the world's population to reach within four hours or less.
The Line will be a critical platform of artificial intelligence data and innovations, inviting foreign investments to achieve sustainable, strategic goals and enhancing the sovereign's ability to boost its economy.
Furthermore, it serves as an approach to detach Saudi's reputation as the world's leading crude exporter and amongst the most polluting nations to date. When realized, the project is forecasted to facilitate over 380.000 employments and contribute approximately 180 Billion riyals--equivalent to USD 48 Billion--to the country's GDP by 2030.
The kingdom's sovereign-wealth fund and finance ministry have already invested more than USD 1 billion into the project's initial infrastructure, master plans, and labor wages.
Moreover, several companies like Softbank and the U.S. chemical company Air Products & Chemical have also expressed their support through capital contributions as significant as USD 5 billion to develop the soon-to-be world's largest green hydrogen-production facility.
Challenges on Neom Project Development
However, the project has its fair share of challenges, with the COVID-19 pandemic slowing down investment trades globally.
The total foreign direct investment inflow to Saudi Arabia reached USD 5.4 billion in 2020, a modest number compared to the average investment inflow a decade ago--USD 16 billion a year.
Aside from the pandemic, the project has also been receiving doubts due to the previous project delay. The former King Abdullah launched a plan to build a financial center in Riyadh in 2005, yet the project is a decade behind schedule.
The same fate goes to its similar project, King Abdullah Economic City (KAEC) that struggles to realize a special economic zone for international companies.
Ambitious Breakthrough
Regardless of its challenges, the Neom city project is in development. To date, the project employs over 750 people to help build The Line. The Saudi government is hoping more investors and partners will reel in once the flagship project is in progress, reducing the greenfield investments.
There are many opportunities for multinational providers seeking to contribute to the world's first cognitive city. Neom project has recently announced a deal with the region's firm STC Group to establish a 5G network for the city's development.
The Line plans to be three times larger than New York City, leveraging its geographical location to generate wind and solar energy to power almost the entire city.
With the trends of artificial intelligence across the globe, the vision of Neom is highly enticing for foreign investors to chip in and be a part of history. However, success will rely on the implementation of the first phase development in 2021.
