Neom takes out $3.7bn loan to fund Saudi Arabia's beleaguered project
Saudi Arabia's de facto ruler, crown prince Mohammed bin Salman, was forced to take out a large loan to fund the construction of his pet mega city project, Neom.
The $500 billion project, built partly on land occupied by the Huwaitat tribe, is a key part of Saudi Arabia's Vision 2030 strategy. It aims to symbolise a transformed kingdom, one of modernisation and progress.
However, a combination of falling oil prices, coronavirus and a lack of international investors, largely put off potential partnerships due to Saudi Arabia's appalling human rights record, have put the future of the project into question.
The loan, totalling $3.7 billion, came from five local banks. It went to the sovereign wealth fund-backed Red Sea Development Company, which is the official developer of Neom. The loan process is due to be complete by the end of the year.
Taking out a loan of this nature is of significance for Saudi Arabia, which has historically been able to draw on its oil wealth. But the kingdom's economic woes have meant it has already burned through foreign reserves and taken out $26.6 billion loans to stimulate its economy.
Out of desperation, the kingdom's rulers are also said to be considering the sale of state assets and even the introduction of income tax. It has already stripped back its generous welfare system.
How long can the Saudi regime maintain its belief that, amid all this economic chaos, it can still build one the most expensive infrastructure projects in history?
However, none of this has prevented the regime's harassment and detention of Huwaitat tribespeople, who it requires to leave the land in order to bring Neom to fruition. The role of human rights activists around the world remains central to ensuring their struggle is not forgotten.
Read more: NEOM: A Project Doomed To Failure
