Saudi Arabia’s ambitious NEOM project, aimed at reducing the country’s dependence on oil exports, is facing financial challenges. The megacity component of the project, originally planned to house 1.5 million residents and be self-sufficient, has been scaled down to a capacity of only 300,000 residents when completed in 2030.
The downsizing of The Line project reflects the reality of the NEOM project’s estimated cost of 1.5 trillion USD, with funding primarily coming from the Public Investment Fund (PIF) led by Crown Prince Mohammed Bin Salman. However, recent reports indicate that the fund’s cash reserves have decreased to $15 billion, their lowest level since 2020.
Despite these challenges, other aspects of the NEOM project are progressing as planned. The luxury tourist island Sindalah is expected to open this year and plans for the Winter Olympics in Trojena in 2029 are still in place. Additionally, PIF is investing in new technology development with solar and wind farms to create green hydrogen and reduce fossil fuel usage.
Overall, while setbacks are apparent with the NEOM project, its long-term goals remain intact as Saudi Arabia continues its efforts to diversify its economy and reduce its reliance on oil exports.
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