Saudi Arabia’s mega-project NEOM will be presented as a generational investment with a long-term horizon, Minister of Investment Khalid Al-Falih said. “This is not for a short period of time,” Al-Falih said about NEOM, saying it was a project meant to take place over several decades. He said this in a statement at the World Investment Conference in Riyadh.
Al-Falih observed that although people expect immediate foreign investment in NEOM, the massive scale and scope of the project would take much longer to be invested in. “NEOM was a long-term investment from the start.” Anyone expecting foreign investment to materialize within two, three, or even five years has misunderstood the nature of the project—this is a generational investment,” he remarked. He added that development momentum is picking up, and with foundational assets readied to enter the market, investment potential is expected to build up.
The project lies at the heart of Saudi Arabia’s economic strategy, set out in Vision 2030, its plan to take the economy off fossil fuels. Over an area roughly the size of Belgium, it stretches across the length and breadth of the Red Sea. When it’s complete, it will accommodate 9 million people. Of course, there is the support of the Public Investment Fund, often tagged the sovereign wealth fund of Saudi Arabia, which has absorbed billions into several large-scale projects.
After the last departure of NEOM’s CEO, Nadhmi Al-Nasr, Al-Falih assured stakeholders this change will not affect investor confidence. Al-Nasr was celebrated for his influential contributions, and even with his exit, he reminded everyone that changes in leadership are part of the normal evolution of large-scale initiatives.
Al-Falih also threw light on the rising interest from international investors in NEOM, saying that foreign investment is going through an increasing phase. However, he emphasized that funding strategy was never going to focus solely on the Public Investment Fund (PIF). “Foreign investors are increasingly directing capital toward the project, with some initiatives slated for financing through global capital pools, including alternative and private funding sources,” he explained.
The desire of the Saudi state to raise its annual foreign direct investment value to $100 billion by 2030 also looms over NEOM’s development. Foreign investors have traditionally been hesitant; however, Al-Falih seems to be gaining increasing confidence in the profitability of NEOM and called the risk-return dynamics for investors favorable.
