SoftBank Group Corp. has signed memorandum of understanding with Saudi Arabia to build a $200 billion solar power project in the kingdom. The deal announced in a press conference in New York is expected to be the world’s biggest solar power generation project. Saudi Crown Prince Mohammed Bin Salman after being announced the successor of his father, King Salman bin Abdulaziz went on to sign the deal with SoftBank founder Masayoshi Son in New York during his three weeks trip to U.S.
The project is expected to have the capacity to produce up to 200 gigawatts (GW) by 2030. That would add to around 400 GW of globally installed power capacity and is comparable to the world’s total nuclear power capacity of around 390 GW as of the end of 2016. The project is expected to generate 100,000 jobs and lay off $40 billion off the power costs. The initial phases of the project includes construction of two solar parks which will be able to generate 7.2 gigawatts of power and are scheduled to begin construction this year and start generating electricity in 2019.
SoftBank Group Corp’s Vision Fund is expected to provide the initial funding for the project. The cost of the two parks will be about $5 billion, with $1 billion coming from Softbank’s Vision Fund and $4 billion from project financing. SoftBank also announced it raised over $93 billion for the Vision Fund, the world’s largest private equity fund with backers including Saudi Arabia’s sovereign wealth fund, Apple and Foxconn, formally known as Hon Hai Precision Industry.
Prince Mohammed said,
“It’s a huge step in human history. It’s bold, risky and we hope we succeed doing that.”
SoftBank founder Masayoshi Son told the reporters,
“the kingdom has great sunshine, great size of available land and great engineers great labor, but most importantly, the best and greatest vision.”
In October, SoftBank Group Corp said it will work with Saudi Arabia on the development of “Neom”, a new business and industrial city in the country. The partnership between the SoftBank and Saudi Arabia is expected to bring new series of investments and mega projects in future.