Saudi Arabia just announced plans to build a $500 billion mega-city that's 33 times the size of New York City

  • The Saudi Arabian government says it will build a $500 billion mega-city, with the goal of diversifying its economy to focus less on crude oil.
  • The project, called NEOM, will measure 10,230 square miles.
  • Saudi Crown Prince Mohammed bin Salman said the government will aim to make NEOM run on 100% renewable energy — a highly ambitious goal.

Saudi Arabia is the world's largest oil exporter, but falling oil prices have made it more difficult for the country to pay its oil workers.

Now the Saudi Arabian government has come up with a project that could give its economy a boost: a $500 billion mega-city that will connect to Jordan and Egypt and be powered completely by renewable energy.

On Tuesday, Saudi Crown Prince Mohammed bin Salman announced the project, called NEOM, at the Future Investment Initiative conference in Riyadh. It will be financed by the Saudi government and private investors, according to Reuters. 

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A woman speaks on the phone as men ride a motorcycle on a cloudy day in Riyadh November 17, 2013. Picture taken November 17, 2013. REUTERS/Faisal Al Nasser (SAUDI ARABIA - Tags: SOCIETY)
A man uses a makeshift aerial lift to transport a cart between Fifa Mountains, in Jazan, south of Saudi Arabia, April 8, 2017. Picture taken April 8, 2017. REUTERS/Mohamed Al Hwaity
A picture taken on June 7, 2017 shows Al-Faisaliah Tower in the centre of the Saudi capital, Riyadh. / AFP PHOTO / FAYEZ NURELDINE (Photo credit should read FAYEZ NURELDINE/AFP/Getty Images)
Foreign workers on a rest day shop for fresh food products from a market stall in Riyadh, Saudi Arabia, on Thursday, Dec. 1, 2016. Saudi Arabia is working to reduce the Middle Easts biggest economys reliance on oil, which provides three-quarters of government revenue, as part of a plan for the biggest economic shakeup since the countrys founding. Photographer: Simon Dawson/Bloomberg via Getty Images
A woman uses her mobile phone in a cafe in Riyadh, Saudi Arabia October 6, 2016. Picture taken October 6, 2016. REUTERS/Faisal Al Nasser
A Saudi man reads a newspaper at a coffee shop in Riyadh, Saudi Arabia September 27, 2016. REUTERS/Faisal Al Nasser
Clouds move over the Riyadh skyline November 17, 2013. Picture taken November 17, 2013. REUTERS/Faisal Al Nasser (SAUDI ARABIA - Tags: CITYSCAPE SOCIETY ENVIRONMENT)
Veiled Saudi women take photos of their children during a ceremony to celebrate Saudi Arabia's Independence Day in Riyadh September 23, 2009. REUTERS/Fahad Shadeed (SAUDI ARABIA SOCIETY ANNIVERSARY)
Visitors look at books during the Riyadh Book Fair at the International Exhibition Center in Riyadh, March 7, 2013. REUTERS/Susan Baaghil (SAUDI ARABIA - Tags: SOCIETY)
A man display dates for sale during the Festival of Dates ahead of the holy month of Ramadan, in Buraidah, north of Riyadh August 18, 2009. Muslims around the world abstain from eating, drinking and conducting sexual relations from sunrise to sunset during Ramadan, the holiest month in the Islamic calendar. REUTERS/Fahad Shadeed (SAUDI ARABIA SOCIETY)
Light trails from automobile traffic traveling along the King Fahd highway, left, and Olaya Street, right, lead towards the Kingdom Tower, center rear, in Riyadh, Saudi Arabia, on Thursday, Dec. 1, 2016. Saudi Arabia is working to reduce the Middle Easts biggest economys reliance on oil, which provides three-quarters of government revenue, as part of a plan for the biggest economic shakeup since the countrys founding. Photographer: Simon Dawson/Bloomberg via Getty Images
Women wait outside a shop in the Saudi capital Riyadh on February 17, 2009. Saudis have cheered King Abdullah's sweeping government shakeup as a bold step forward, after he sacked two powerful conservative religious figures and named the country's first-ever woman minister. The Saudi monarch announced the first major government shakeup on February 14 since he became king in August 2005, naming four new ministers, changing a number of top judiciary chiefs and shaking up the Ulema Council, the leading clerics whose interpretations of Islamic rules underpin daily life in the kingdom. AFP PHOTO/STR (Photo credit should read -/AFP/Getty Images)
A Saudi family plays in the sand dunes near Buraydah, 400 kms northwest Riyadh on March 11, 2016. / AFP / FAYEZ NURELDINE (Photo credit should read FAYEZ NURELDINE/AFP/Getty Images)
Automobile traffic moves along the King Fahd highway in the late evening in Riyadh, Saudi Arabia, on Tuesday, Nov. 29, 2016. Saudi Arabia is working to reduce the the Middle Easts biggest economys reliance on oil, which provides three-quarters of government revenue, as part of a plan for the biggest economic shakeup since the countrys founding. Photographer: Simon Dawson/Bloomberg via Getty Images
The late evening sun sets overs residential and commercial buildings in Riyadh, Saudi Arabia, on Thursday, Dec. 1, 2016. Saudi Arabia is working to reduce the Middle Easts biggest economys reliance on oil, which provides three-quarters of government revenue, as part of a plan for the biggest economic shakeup since the countrys founding. Photographer: Simon Dawson/Bloomberg via Getty Images
Customers use automated teller machines (ATM) inside the Al Rajhi Bank in Riyadh, Saudi Arabia, on Thursday, Dec. 1, 2016. Saudi Arabia is working to reduce the Middle Easts biggest economys reliance on oil, which provides three-quarters of government revenue, as part of a plan for the biggest economic shakeup since the countrys founding. Photographer: Simon Dawson/Bloomberg via Getty Images
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The business and industrial-focused city will span 10,230 square miles. To put that size in perspective, 10,230 square miles is more than 33 times the land area of New York City.

Discover NEOMDiscover NEOM

NEOM's larger goal is to lessen Saudi Arabia's reliance on oil exports, which could expand the country's economy beyond oil, bin Salmon said at the conference. The city will focus on a variety of industries, including energy and water, biotechnology, food, advanced manufacturing, and entertainment. Saudi Arabia hasn't released a masterplan yet for what it will look like.

The country appointed Klaus Kleinfeld, a former chief executive of Siemens AG and Alcoa Inc, to run the NEOM project. Officials hope that a funding program, which includes selling 5% of oil giant Saudi Aramco, will raise $300 billion for NEOM's construction.

saudi arabia crown princeReuters

The project could make NEOM one of the largest cities to run without fossil fuels. In the US, one of the largest cities to run on 100% renewable energy is Burlington, Vermont, which doesn't come close to the planned size of NEOM. Cities in Iceland and Norway also claim to be close to achieving entirely renewable electrical grids with help from natural resources like hydropower and geothermal heat.

Saudi Arabia expects to complete NEOM's first section by 2025.

"This place is not for conventional people or conventional companies, this will be a place for the dreamers for the world," bin Salmon said on a panel at the conference. "The strong political will and the desire of a nation. All the success factors are there to create something big in Saudi Arabia."

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