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Italian state export credit agency Sace pledged USD 3 bn in loan guarantees to Neom, providing 80% guarantees for international bank loans backing the megaproject, Bloomberg reports, citing people with knowledge of the matter. The story was also picked up by Reuters.
Italy is thinking ahead: The Italian government believes that the loan guarantees could open the way for Italian infrastructure, construction, and transport firms to clinch valuable contracts in Neom, sources told Bloomberg. Sace — which is run by Italy’s Finance Ministry — opened a branch in Riyadh earlier this year and Italian Prime Minister Giorgia Meloni may visit the Kingdom next, the business news information services said. Italian engineering outfit Webuild SpA is a contractor at Neom, grabbing a USD 4.7 bn contract for developments at Trojena and a high-speed railway.
Neom needs the boost: The ambitious project was initially budgeted at USD 500 bn, but many analysts believe its costs significantly exceed that projection. A string of budget deficits and declining oil prices have also limited the funding available for the megacity, as Riyadh recalibrates spending towards megaprojects that are smaller in scale.
