Saudi Arabia’s NEOM megaproject is gearing up for its inaugural Saudi riyal Islamic bond (sukuk) sale this year, with plans to raise as much as SAR5 billion ($1.3 billion), Bloomberg reported, citing people familiar with the matter.

The fundraising aims to support the ambitious $1.5 trillion worth of construction projects planned in the futuristic city, the report said.

Neom has appointed banks, including HSBC Holdings and the securities units of Al Rajhi Bank and Saudi National Bank, to advise on the sukuk sale, the report said.

The sukuk sale is anticipated in the second half of the year, Bloomberg said. However, the final decision on timing and offering size will depend on the prevailing market conditions.

The report said NEOM recently secured a SAR 10 billion loan from a consortium of Saudi banks and raised SAR 3 billion to fund Sindalah, a luxury tourism island off the Red Sea.

Earlier this month, Bloomberg said that Saudi Arabia revised its mid-term objectives for the NEOM.

The Line development is now expected to accommodate less than 300,000 residents by 2030, compared to its earlier projection of 1.5 million, the report said.

The project, a 170-kilometer, zero-carbon, urban-development development, will be built in stages with only 2.4 kilometres slated for completion by 2030, the news agency reported.

(Editing by Seban Scaria )