Saudi Arabia’s $500 Billion Megacity Project in Trouble – Oil Prices Drop & Investors Backing Out!

Saudi Arabia’s $500 Billion Megacity Project in Trouble – Oil Prices Drop & Investors Backing Out!

Saudi Arabia’s ambitious plans for the line have faced an unexpected setback instead of advancing as initially intended they seem to be retracting shrinking the proposed distance from 105 M to just 1.49 Mi this change indicates that the Saudi Prince’s dream project still has a long way to go before it can be deemed successful but what caused this drastic change why is Saudi Arabia backing out on this Mega project stick around to find out while Saudi Arabia has revised its plans for the line originally envisioning a 500 met tall mirrored linear City spanning 170 km across the desert to accommodate 9 million people their new goal is to construct only 2.4 km of it by 2030 with less than 300,000 residents moving in this decision has resulted in some workers being laid off by at least one contractor on the site according to a document seen by Bloomberg despite the cutbacks building even this small portion of the line poses a significant engineering challenge it entails erecting two towering skyscrapers each 500 M tall reminiscent of New York’s One World Trade Center stretching horizontally for 2.4 km in the heart of the desert despite Saudi Arabia’s decision to scale back plans for the line progress has not come to a standstill substantial Headway has been made on the project site as the line is set to comprise interconnected communities referred to as modules originally planned to consist of 135 modules each stretching 800 m in length and towering 500 M tall the recent decision to reduce the line’s length to 2.4 km leaves uncertainty regarding the number of modules to be included and whether their Dimensions will remain unchanged nevertheless construction is currently underway on modules 44 45 46 and 47 in the hidden Marina the line and sever other major projects are integral to Saudi Arabia’s Vision 2030 initiative spearheaded by the public investment fund these projects including the line demand over a trillion dollars in investment the primary revenue stream for the public investment fund is derived from oil revenues and with the recent substantial decline in oil prices it has experienced a significant impact regarding Saudi Arabia’s dollar reserves Bloomberg reports from 2014 indicated cash reserves of 74 $ 4 billion which dwindled to 414 billion by 2024 initially there was optimism within the government and among the Crown Prince that announcing these Mega projects would attract interest and investment from Global Investors Saudi Arabia even devised a comprehensive plan to boost foreign direct investment in the country annually aiming to reach $100 billion by 2030 this forecast suggested an expectation of receiving $100 billion from Global Sources by 2030 however reality diverged from these expectations in 2023 foreign direct investment was anticipated to fall within the range of 25 to 27 billion for Saudi Arabia yet the actual inflow amounted to only $19 billion consequently Saudi Arabia finds itself increasingly dependent on oil revenues to sustain its Mega projects however these revenues are dwindling as oil prices continue to decline to potentially bolster oil prices Saudi Arabia May propose extending the production limits set by OPEC a group it co-leads with Russia these limits have historically contributed to stabilizing or even increasing oil prices despite such efforts oil prices remain below the threshold necessary for Saudi Arabia to finance its ambitious plans according to Bloomberg economics Saudi Arabia requires oil prices to be at least $18 per barrel to balance its budget factoring in domestic spending by the public investment fund although there has been a recent uptick in oil prices they still hover below $90 per barrel consequently Saudi Arabia is financing numerous projects from its own resources resulting in significant losses investing from its own budget ties up funds until projects are completed and start generating Revenue this heavy Reliance on internal funding has depleted available cash reserves which currently stand at just 15 billion ion marking the lowest level since 2020 this situation highlights the financial difficulties Saudi Arabia is facing According to some reports Saudi Arabia has recently asked Kuwait its smaller neighbor for more than $16 billion in funding for different projects including neom while this money has been secured there’s a question of whether Saudi Arabia can achieve its Vision 2030 goals if this continues neom is also about to start its first project this year which will have a big impact on Nom’s development especially the line the success of this project called syala is crucial if it succeeds neom could benefit a lot and attract more investors but if it fails it could hurt all of Nom’s projects in short cinda’s success is important for both Saudi Arabia and attracting investors to neom if it works out there’s a good chance more investors will be interested in neom construction in Cinda is moving quickly but the exact launch date hasn’t been confirmed yet and if cindel fails neom will rely more on public funds which mostly come from oil reserves this shows the delicate financial situation Saudi Arabia faces as it tries to carry out big projects while dealing with money issues in the current landscape there’s a noticeable shift steering away from fossil fuels towards renewable energy sources as a result Saudi Arabia is actively progressing in the development of an advanced system for energy water and green hydrogen in line with this vision neom is striving to harness clean resources efficiently not only are they establishing grid infrastructure but they’re also dedicated to environmental preservation through Innovative and sustainable Technologies a significant milestone for neom has been the initiation of a project valued at over $8 billion aimed at constructing solar and wind farms these Farms will generate green hydrogen a fuel derived from renewable energy sources Saudi Arabia aspires to emerge as one of the world’s leading producers of green hydrogen aiming to lessen its Reliance on oil sales expected to be completed by the end of 2026 this project will stand as the largest green hydrogen production facility globally it is projected to yield up to 1.2 million tons of green ammonia annually equivalent to 600 tons of green hydrogen per day this green ammonia will be exported to International markets contributing to the reduction of carbon dioxide emissions particularly in the heavy duty transport sector in addition to the green hydrogen project neom has launched the Region’s first hydrogen and energy Innovation Center this establishment will act as a central hub for research development training and innovation in hydrogen energy its core mission is to drive progress in green hydrogen production storage and transportation aiming to enhance knowledge and capabilities in these vital areas well that’s about it for today’s video do you think Sou Saudi Arabia will actually get to finish this Mega project let us know in the comments below we would love to hear from you if you liked today’s content do give us a like And subscribe to the channel thank you so much for watching and we’ll see you on the next one [Music]

Welcome to Innovative MEGAPROJECTS channel! In this video, Saudi Arabia has decided to scale back its ambitious ‘THE LINE’ project, ultimately leading to its cancellation. The billion-dollar project, announced by Crown Prince Mohammed bin Salman, aimed to build a futuristic city without cars, powered solely by renewable energy. However, the recent DECLINE in “oil prices” has forced Saudi Arabia to reevaluate its spending priorities. Investors who were once excited about the potential of NEOM are now left shocked and uncertain about the future of the project. The decision to cancel or downscale the project raises questions about Saudi Arabia’s economic stability and its ability to diversify away from oil dependence. While ‘THE LINE’ project promised innovation and technological advancements, it also raised questions about its feasibility and long-term sustainability. By scrapping the project, Saudi Arabia is signaling a shift towards more responsible and inclusive urban development strategies.