Neom has secured a fresh revolving credit facility (RCF) worth SAR 10 bn from local banks to help it meet short-term financing needs as it picks up the pace for its USD 500 mn development, it said in a statement.

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What we know: The new facility, which follows a Murabaha structure, saw “strong interest” with the participation of nine local banks. The Saudi National Bank, Riyad Bank and Saudi Awwal Bank were lead arrangers for the RCF, while other participant banks included Al Rajhi, Alinma Bank, Arab National Bank, Bank Albilad, the Saudi Investment Bank, and Bank AlJazira.

Some of the city’s landmark projects have been lining up funds: Neom Green Hydrogen Company (NGHC) signed a SAR 23 bn (c. USD 6.1 bn) agreement in May last year with a number of local, regional and international banks to finance its USD 8.4 bn green hydrogen facility — slated to be the world’s largest green hydrogen production facility. It also secured a SAR 3 bn debt financing facility last year from Riyad Bank for the development of its luxury island destination Sindalah.

REMEMBER- Neom has been looking to diversify its funding sources away from the PIF, which has poured most of the funding into the project in the form of equity. It is reportedly planning a SAR-denominated bond sale in what could be the gigaproject’s first-ever sukuk sale. Officials have signaled that government projects will look abroad for financing amid policymakers’ concerns they could be seen as crowding-out private-sector borrowers by soaking up too much bank liquidity.

What they said: “This new credit facility, backed by Saudi Arabia’s leading financial institutions, is a natural fit within our wider strategy for funding. We continue to explore a variety of funding sources as we deliver transformational infrastructure assets while supporting the wider Vision 2030 program,” Neom CEO Nadhmi Al Nasr said.

SHOW AND TELL CONTINUES-

Neom hosted representatives of 52 unnamed global and local lenders to show actual progress in the futuristic city amid reports of a slower buildout, it said in a separate statement. Some 24 representatives from global banks from Germany, Spain, France, England, the US, China, Japan, and South Korea attended Neom’s show and tell. The event also saw the attendance of 13 regional banks from Qatar, Kuwait and UAE and 15 local financial institutions.

Neom just came off the road in China — officials have been particularly interested in driving interest from Hong Kong, Beijing, and Shanghai.

BACKGROUND- Bloomberg reported recently that the buildout of The Line was moving slower than planned. Officials at Neom replied quickly, bringing in top execs from some 100 global construction firms earlier this month to assure them the buildout is proceeding on schedule — and that more business is in the pipeline.

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