Saudi Arabia's $500 billion Neom megacity is reportedly seeking new sources of cash

• Saudi Arabia's Neom is planning its first bond sale, Bloomberg reported.
• The issuance could take place later this year and raise up to $1.3 billion, per the outlet.
• Neom is the centerpiece of Saudi Crown Prince Mohammed Bin Salman's Vision 2030 project.

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Saudi Arabia's Neom project is set to issue bonds for the first time as its developers seek new funding sources, Bloomberg reported.

The $500 billion desert megacity could raise up to $1.3 billion by selling Islamic bonds, or sukuk, the outlet reported on Wednesday, citing unnamed sources.

The sukuk issuance may take place later this year, according to Bloomberg.

Neom is the centerpiece of Saudi Crown Prince Mohammed Bin Salman's Vision 2030 project, a diversification drive aiming to pivot Saudi Arabia's economy away from oil and into other sectors, including tech.

The country's sovereign wealth fund, PIF, has provided most of the funding for the massive project, although it's reportedly yet to approve Neom's budget for 2024 amid concerns about rising costs.

The realities of the scale and expense of Vision 2030 have started to cause alarm at the highest level of the Saudi government, Bloomberg reported earlier this month.

In February, The Wall Street Journal reported that Saudi Arabia had started borrowing to help fund Neom and other Vision 2030 "gigaprojects."

Tim Callen, a visiting fellow at the Arab Gulf States Institute think tank in Washington, estimated that PIF would need to raise another $270 billion to fully realize its ambitions.

The best-known section of Neom is The Line — a city contained within twin 1,640-foot-high mirrored skyscrapers running parallel some 656 feet apart. According to Neom's website, it'll have no roads, cars, or emissions and run entirely on renewable energy.

Neom developers are also planning to build a "next-generation" sustainable port on the coast of the Red Sea, a ski and adventure resort, and a luxury island called Sindalha.

Neom did not immediately respond to a request for comment from Business Insider, and declined to comment to Bloomberg.