Bigger than Washington DC and backed by Emaar: Saudi Arabia's plans to build the city of the future

There can’t be many Saudi projects that can claim to have been unaffected by the oil price slide, but then again, King Abdullah Economic City (KAEC) is no ordinary undertaking.

Located an hour’s drive north of Jeddah, KAEC has been described as the world’s largest real estate project. By the time it is completed, probably at some point in the mid-2030s, roughly $100bn worth of investment will have been ploughed into the city, which is set to play a vital role in the diversification of Saudi Arabia’s economy away from oil.

A public private partnership between Dubai’s Emaar and local investors, the megaproject involves the construction of an entire city — from scratch — on a site that’s about the size of Washington, DC.

“We don’t have a direct funding relationship with the government so the oil price doesn’t affect us,” says Fahd Al Rasheed (pictured below), the long-serving group CEO of publicly listed Emaar Economic City, the firm behind KAEC.

“But I think the biggest challenge is whether you see a slowdown in growth because companies are not investing. We have not seen that yet — we are still signing one company a week.”

Launched about a decade ago, some of the city’s components, such as King Abdullah Port, are now operational. Some of the world’s most famous companies, including Mars, Sanofi, Pfizer and Danone, are among the 100 corporates that have set up shop in KAEC’s Industrial Valley, while a slew of big-name local firms are also building facilities there.

And in a part of the world where commercial vehicle manufacturing is conspicuous by its absence, KAEC notched up another milestone last month, when the first Volvo truck rolled out of the Arabian Vehicles & Trucks Industry plant in the city. It will be one of the first factories worldwide to produce Volvo and Renault trucks from the same assembly line. By the end of this year, city planners are hoping to have 50 factories up and running.

Original article by Ed Atwood

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Bigger than Washington DC and backed by Emaar: Saudi Arabia’s plans to build the city of the future