- Saudi Arabia plans to build one of the world’s most iconic cities called Neom
- Sources say the kingdom is looking to use a part Aramco’s IPO funds to finance the city construction
- Aramco is set to price its IPO next month
Picture this – Waking up in a high-rise penthouse facing the Red Sea, with a giant artificial moon that live-streams images from outer space hanging from up. If you need to head somewhere, you order for an automated flying taxi to transport you as it genetically modifies your organs to make you stronger.
And by the time you get home, the robot assistants have cleaned up the place and made you one of your favorite dishes. Then, later on, you decide to step out for a night out with your loved ones in one of the several five Michelin star restaurants near you and thereafter, have a tour of the robot dinosaur park.
Sounds like a fairy tale, right? Well, maybe to you, but not Saudi Arabia’s Crown Prince Mohammad bin Salman Al-Saudi. All the above-mentioned have directly been lifted from his great plan to build a new city with such qualities.
The city, described as “land of the future,” will be known as Neom, and will be the size of an average city in the UK or the US. Plans are underway to build Neom City on Saudi’s northwest coastline. The city will be built strategically to attract international investors and tourists as well as “the world’s greatest minds and best talents.”
While you may find Salman’s plan to be ambitiously crazy, the crown prince is already laying grounds for his city. Bloomberg reports that two Saudi contractors have already been given an okay to commence the construction.
Sources say the mega-city will cost the kingdom about $500 billion, an amount that has many investors sweating. Earlier this year, the IMF reported a 7% deficit in Saudi’s budget.
So with a budget deficit and unstable global oil prices, how does the crown prince plan to finance the building of his ultra-modern city?
The prince is counting on Saudi Aramco, the most profitable public company in the world to build Neom City.
Many may term it as a coincidence – but the fact that the city’s construction kicks off as the country’s national oil company Saudi Aramco plans to issue its IPO is no coincidence.
Earlier last week, the country’s Capital Markets Authority announced that the oil giant would finally trade on its local stock market, Tadawul. Aramco was listed as the most profitable company in 2018, having generated a net income of $111 billion. Coupled with a valuation of $1.5 to $2 trillion, the whole Saudi equity market would be no match for the oil company.