Crown Prince of Saudi Arabia Mohammed bin Salman announced plans for a US$500 billion economic zone to be established on the recently ceded Tiran and Sanafir islands during his address at the the Future Investment Initiative summit held in Riyadh on Tuesday.
The economic zone, which is expected to span 26,000 square kilometers, is named Neom and is part of the “Saudi Vision 2030” plan to reduce the kingdom’s dependence on oil.
The project is overseen by Salman and is set to include a number of economic and infrastructure projects, housing facilities and a bridge connecting Saudi and Egypt. According to the website, it is hoped this will attract $500 billion in investments, with the first stage of construction scheduled for completion in 2025.
Investments in renewable energy and medical research into genetics and bioengineering are also included in Neom, and provisions have been made for the creation of media authorities and several mega-studios.
The Saudi government stated on the website that the project aims to “prevent GDP leakage by giving an opportunity for investments inside the kingdom for those who [traditionally] invest their money abroad due to the lack of major investment opportunities.” the Saudi government said.
The two Red Sea islands, where the economic zone is to be established, were the subject of controversy and an ensuing legal battle after President Abdel Fattah al-Sisi signed an agreement ceding Egypt’s sovereignty over them to Saudi in April 2016.
Public outcry and a slew of lawsuits contesting the legality of the border demarcation followed the signing of the agreement, until it was approved by Parliament on June 14, and ratified by Sisi several days later.