Saudi Arabia is going into debt to plug holes in its finances, Bloomberg reported.
Riyadh has continued with major spending plans as part of a drive for economic diversification.
It must now fill a budget deficit of $21 billion, according to the media.
Saudi Arabia plans to raise money by selling bonds as it continues its massive spending plans, Bloomberg reported.
The kingdom will issue three-, six- and 10-year dollar-denominated sukuk as part of an effort to plug a budget deficit expected to reach $21 billion by the end of the year, the media outlet reported citing an anonymous source.
Riyadh had already sold $12 billion worth of sovereign debt in January, while desert megacity Neom is also reportedly considering issuing Islamic bonds in a bid to raise more cash.
Citigroup, Goldman Sachs and French bank BNP Paribas will coordinate the sale of the bonds, according to Bloomberg.
The latest bond sale comes as Saudi Arabia continues to implement Mohammed bin Salman’s Vision 2030 plan, which aims to diversify its oil-dependent economy.
As part of the massive spending project, the kingdom plans to build Neom, which could cost up to $1.5 trillion. He has also invested billions of dollars in sports, luring soccer stars like Cristiano Ronaldo, Karim Benzema and Neymar to play in the local Saudi Pro League and supporting the separatist LIV golf tournament.
In February, the Wall Street Journal reported that Saudi Arabia had begun borrowing to help finance Neom and other Vision 2030 “gigaprojects.”
Tim Callen, a visiting fellow at the Arab Gulf States Institute think tank in Washington, estimates that Saudi Arabia’s sovereign wealth fund, the PIF, would need to raise an additional $270 billion if it was to fully realize its ambitions.
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