DUBAI: Saudi Arabia’s planned mega-city NEOM has secured 21 billion riyals ($5.60 billion) in financing and finalized contracts to develop the first phase of housing expansion for its workforce, it said in a statement on Tuesday.

NEOM, a huge economic zone eventually meant to house nine million people, said it plans to offer contracts for a second phase in the temporary residential project in the coming months.

Saudi Arabia’s Crown Prince Mohammed bin Salman announced plans for NEOM in 2017 as part of his Vision 2030 reform plan, which aims to diversify Saudi Arabia’s economy away from oil.

The kingdom’s sovereign wealth fund is the cornerstone investor in NEOM, a 26,500-square-km (10,230-square-mile) high-tech development on the Red Sea with several zones, including industrial and logistics areas.

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NEOM is expected to have capacity for 450,000 people by 2026 and 1.5-2 million people by 2030, eventually housing nine million by 2045, the crown prince said.

The agreement will see an additional 10 communities established across NEOM, adding capacity for 95,000 more occupants once the first phase of the project is completed, NEOM said.

The temporary accommodation, needed during the construction period, can be repurposed once it is no longer needed, it added.