NEOM Secures New SAR 10 Billion Credit Facility to Propel Major Developments

NEOM Secures New SAR 10 Billion Credit Facility to Propel Major Developments

NEOM secures SAR 10 billion revolving credit facility, advancing major projects under Saudi Vision 2030. Key banks support NEOM’s strategy to diversify funding sources.

In a significant advancement towards its developmental goals, NEOM has successfully secured a new revolving credit facility (RCF) valued at SAR 10 billion. 

This strategic financial maneuver underscores NEOM’s commitment to bolstering its projects as part of Saudi Arabia’s broader Vision 2030 initiative.

Understanding the Revolving Credit Facility

A revolving credit facility is a type of flexible loan that provides the borrower with the ability to draw, repay, and re-borrow funds. 

This facility is particularly beneficial for managing a company’s cash flow and financing short-term operational needs.

Overview of NEOM’s Recent Financial Activities

Financial ActivityAmount (SAR)Purpose
New RCF10 billionSupport short-term financing requirements
NEOM Green Hydrogen Company Financing23 billionFinance the green hydrogen project
Debt Financing for Sindalah Development3 billionPartial funding for luxury island destination

The Structure and Support

The newly acquired RCF follows a Murabaha structure, an Islamic financing format where the bank purchases the goods and sells them to the customer at a profit, avoiding interest payments which aligns with Islamic financial principles. 

This facility reflects NEOM’s ongoing strategy to diversify its funding sources.

Words from the Leadership

Nadhmi Al-Nasr, CEO of NEOM, highlighted the importance of the new facility: “As NEOM continues to gather pace, 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 is among the largest projects in the world today, and we value the partnership we have with our relationship banks in facilitating access to a range of flexible financing options as we deliver on our ambition.”

Also Read:  NEOM Engages Chinese Investors to Shape the Future of Urban Development

Banking Partnerships and Future Prospects

The transaction targeted Saudi relationship banks and witnessed strong interest, culminating in the participation of nine notable banks.

Banks Participating in NEOM’s RCF

Bank NameRole
Saudi National BankMandated Lead Arranger
Riyad BankMandated Lead Arranger
Saudi Awwal BankMandated Lead Arranger
Al Rajhi Banking and Investment CorpParticipant
Alinma BankParticipant
Arab National BankParticipant
Bank AlbiladParticipant
The Saudi Investment BankParticipant
Bank AlJaziraParticipant

NEOM’s ongoing financial strategies demonstrate a robust framework aimed at facilitating major infrastructure developments, ensuring the growth of this mega-project aligns with Saudi Arabia’s futuristic ambitions. 

This recent financial endorsement will bolster NEOM’s capacity to undertake and deliver on its extensive development plans, setting a precedent for modern urban advancements.

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