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NEOM Investors

Situated on 468 km of coastline in the north west of Saudi Arabia, and strategically close to the Suez Canal, NEOM will form the world's largest project. With imagination and inventiveness as its cornerstones, the plan is described as "unconstrained by history" by DiscoverNEOM. Indeed, if Neom Zone is floated one day according to plan, history will truly be made.

NEOM will be primarily owned by Saudi Arabia's sovereign wealth fund – the Public Investment Fund (PIF) – its initial value will exceed $500 billion and independent investors are invited to participate. The PIF currently maintains a portfolio of around 200 investments. Its goal is to transform the Kingdom's economy and reduce its dependence on oil revenue.

Sovereign wealth funds have transformed themselves in the last couple of decades. The UAE's sovereign owned Mubadala Investment Company has long considered that its activities should go beyond simply making wise investments – its activities should also benefit Emirates' society. As Arab News put it, they "see themselves as much as agencies of economic and social change as they are investment houses."

"It [Mubadala] often insisted on elements of technology transfer and local job creation as part of its investment strategy."

"Other Mubadala investments – in aerospace, for example – led to the creation of manufacturing facilities and real jobs in the UAE for Emirati citizens."

"It is hard to imagine Saudi Arabia ever ending its love affair with oil, but there is a similar radical process at work in the thinking of the Public Investment Fund, the once-sleeping government pensions agency now turned dynamic global investor in cutting-edge sectors such as technology, robotics and artificial intelligence."

Tech is the new black for sovereign funds

Arab News

Every effort will be made to create a positive and supportive business environment. Slated to have autonomous status within the Kingdom, NEOM will have its own separate regulatory framework to facilitate this aim.

The zone is projected to make a major contribution to Saudi Arabia's GDP in the long term. This could reach $100 billion per annum by the year 2030 around the time when a grand listing of the project will be contemplated. So ultimately, NEOM is to be investor owned, the first ever listed metropolis, though the Kingdom will be the majority owner.

"NEOM will operate as an independent economic zone – with its own laws, taxes and regulations specially created to boost healthy growth and wealth for the region, investors and residents."

Welcome to NEOM

Discover NEOM (Official website)

The PIF has financed many strategic projects to support the economy, promote a national economic transformation and achieve the objectives of the Kingdom's long-term Vision 2030 plan.

"For more than 46 years [as at 2017], the PIF has been a leading economic player and has contributed to the development of national investment entities constituting the foundation for overall development, while contributing to the establishment of many of the largest companies in KSA [Kingdom of Saudi Arabia]."

PIF History and Context

Public Investment Fund (pif.gov.sa – Official website)

Many of the world's wealthiest and most sophisticated investors attended the PIFs Future Investment Initiative in Riyadh in October 2017. This is where the startling announcement of NEOM was made.

The goal of the event was to connect many of the world's thought leaders, experts and entrepreneurs to discuss the rapid innovations that are shaping our future, share advanced perspectives, explore the changing role of sovereign wealth capital, and learn about Saudi Arabia's dramatic reform agenda. The initiative to create a knowledge environment is based on three pillars:

Shifting centers of power

The new investment paradigm

Innovation for a better world

Among the more than 3,500 guests were luminaries such as Christine Lagarde (International Monetary Fund), Masayoshi Son (Softbank), Larry Fink (BlackRock), Tong Li (Bank of China International), Lawrence Summers (Harvard University), Khaldoon Khalifa Mubarak (Mubadala), Arianna Huffington (Thrive Global) and Sophia Robot (Hanson Robotics).

"The blueprint also [in addition to increasing non-oil revenue, structural reforms and privatizations] aims to increase foreign direct investment and the private sector contribution to gross domestic product. To aid this process, measures are being introduced to improve the business environment, to restructure the economic cities, to create special zones and to deregulate the energy market to make it more competitive."

"One of the main ambitions of Vision 2030 is to transform Saudi Arabia into a global investment powerhouse."

Vision 2030

Future Investment Initiative (Official website)

a western and arabic businessman in friendly discussion

a western and arabic businessman in friendly discussion

a western and arabic businessman in friendly discussion

Neom Zone will provide limitless opportunities for the talented dreamers of all nations.

Random Investing Themes

Thousands of companies, large and small, will collaborate in NEOM. Here is just a tiny sample of projects on the drawing board:

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HSBC, with vast experience in infrastructure investment, is keen to participate. In an exclusive interview with Al Arabiya, Stuart Gulliver said NEOM could be seen as fitting in neatly with China's Belt and Road initiative. He said that the world may be entering a "Post Columbus period". (After Columbus had made his epic journey, the West had come to dominate the world's economy.)

But now, we may be returning to a modern version of the "Silk Road" which began in Arabia and ended in the Middle Kingdom – leading to the dawn of a "Post Columbus economic structure". NEOM will serve to anchor the western end of the New Silk Road.

"HSBC's CEO Stuart Gulliver confirmed the bank's interest in significantly financing the massive NEOM project, highlighting the economic benefits of this project across the region and the world."

EXCLUSIVE: HSBC CEO says bank interested in financing Saudi NEOM project

Al Arabiya (story and video)

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Prior to the NEOM announcement, Softbank's Masayoshi Son had already formed close ties with Saudi Arabia, having raised $45 billion from the Kingdom's Public Investment Fund for its Vision Fund. Mr Son had been a guest at the Future Investment Initiative. Further, the Vision Fund has already signalled an interest in making a large investment in Saudi Electricity.

"SoftBank Group Corp. plans to invest as much as $25 billion in Saudi Arabia over the next three to four years as the Japanese company run by Masayoshi Son deepens investment ties with the kingdom, according to people familiar with the matter."

"SoftBank aims to deploy up to $15 billion in a new city called Neom… the people said, asking not to be identified…"

"SoftBank also will have some of its portfolio companies open offices in Neom, they said."

SoftBank seen planning up to $25 billion in Saudi investments, including at new city Neom

The Japan Times

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Germany's Siemens is already having serious discussions about its future involvement with NEOM. Siemens believes it has important capabilities which can add great value to the project. It has a prior history of commercial involvement with Saudi Arabia (and the Gulf Region) and is preparing to gear up to advance this relationship.

The Siemens CEO has noted that the UAE understood decades ago that it must begin preparations for a post-hydrocarbon future. In 2015, Siemens won its biggest ever single contract – a huge gas & wind project in Egypt. Neom Zone clearly represents a major opportunity.

" 'I would not be too surprised if anytime soon, there would be a major announcement about the cooperation between the kingdom and Siemens on how to assist and help the kingdom in achieving the Vision 2030 goals, which Neom is part of,' he [Joe Kaeser, Siemens global CEO] said."

" 'These are the five major elements of a city and we have them all together. [Reliable & sustainable energy, transport networks, safety, water and smart buildings.] There is no other company in the world, not a single one, which can do all five in a meaningful way, except Siemens,' he said. 'People in the kingdom know what Siemens is all about.' "

Exclusive: Siemens eyes role in development of Saudi Arabia's $500bn Neom mega city

The National (United Arab Emirates)

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Developing the technology to create energy-neutral or even positive buildings is obviously a wise aim in countries with hot climates.

Schneider Electric has pointed out that smart systems to switch off air conditioning etc when not in use (compared to humans doing so manually) can result in surprisingly massive savings. Making the entire chain of electricity digital can likewise create significant efficiencies. Storage and digital can help overcome the intermittency problem of renewables.

Schneider Electric already has three manufacturing plants in Saudi Arabia.

"We have plenty of opportunities but that's [Neom] a very exciting, inspiring project, and we would love to participate in it…"

"We've increased our investment in Dubai and Saudi [Arabia] every year, and we intend to be here for the long-term. We’ve been gradually increasing our presence in the Middle East…"

Schneider Electric CEO: we'd love to be part of NEOM

CEO Jean-Pascal Tricoire interview

Tahawul Tech

In late 2017 CNBC reported that Schneider announced a commitment to 100 percent renewable energy by 2030. Jean-Pascal Tricoire called for the public and private sectors to collaborate on this "ambitious and productive challenge". Neom Zone may well provide a significant blank canvas for innovation in the energy space.

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The largest property developer in Saudi Arabia, Al Akaria, has formed a joint venture with HanmiGlobal Co., South Korea's leading construction management company. Saudi Arabia will leverage the management expertise of the South Korean company in major future projects.

"The new joint venture is also expected to help HanmiGlobal to take part in the country's mega-city Neom project worth of 550 trillion won and the tourism complex project integrating 50 islets on the Red Sea."

S. Korea's HanmiGlobal sets up JV in Saudi Arabia with Al Akaria

Pulse News

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ABB, with its four divisions (Electrification Products, Robotics and Motion, Industrial Automation and Power Grids) has the appropriate technology and experience for a big participation in NEOM.

ABB's website describes the company as the world's largest supplier of industrial electric motors and manufacturer of transformers. It is also highly skilled in automating industrial processes on a large scale.

"ZURICH: ABB is confident of winning a slice of the $500 billion mega-city project in Saudi Arabia…"

"ABB, with three factories and a long history in Saudi Arabia, is well positioned to provide automation and power to high-tech industries setting up in the country, Spiesshofer [CEO Ulrich Spiesshofer] told reporters…"

" 'There's a wide range of opportunities and we will do our best to participate in that in the appropriate way,' Spiesshofer said."

ABB aims to win Saudi projects in order surge

Arab News

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Russian companies are likely to invest billions in technology and infrastructure projects in the zone. Further, Neom Zone ports are seen as having the potential to become important hubs to facilitate increased exports of Russian agricultural produce to Saudi Arabia and other Gulf countries.

" 'The Russian Direct Investment Fund (RDIF) wants to be a co-investor with other international funds. The Fund will attract leading Russian companies to invest in the creation of the city of Neom, thereby contributing to their high-tech expansion in the promising markets…' RDIF CEO Kirill Dmitriev told reporters..."

Russia to invest billions of dollars in Saudi Arabia's future megacity

RT (Russia Today)

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Within the framework of Saudi Arabia's Vision 2030, The Saudi and Italian Foreign Ministers co-chaired a meeting in Rome in December, 2017 with numerous prominent businesses from each nation represented. Besides the development of business ties – defense, archaeology, tourism and culture were high on the agenda.

Italy has a strong robotic components and related technologies sector which makes significant export sales. This may lead to great opportunities since robots are a major theme in NEOM plans.

"He [Italian Ambassador Luca Ferrari] said that the Italian companies could play a major role in the development of Neom city, especially in the area of robotics and information technology."

Adel Al-Jubeir to co-chair Saudi-Italy meeting

(Adel Al-Jubeir is the Foreign Minister of Saudi Arabia.)

Arab News

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