SoftBank, Saudi Arabia to build $200-bn solar project

Masayoshi Son chairman and chief executiveof Soft Bank Group shakes hands with Crown Prince Mohammed bin Salman in New York after signing an agreement for the huge solar project. Jeenah Moon  Bloomberg

Masayoshi Son chairman and chief executiveof Soft Bank Group shakes hands with Crown Prince Mohammed bin Salman in New York after signing an agreement for the huge solar project. Jeenah Moon Bloomberg

SoftBank founder Masayoshi Son, known for backing ambitious endeavors with flair, unveiled the project Tuesday in NY at a ceremony with Saudi Crown Prince Mohammed Bin Salman.

The project is consistent with Saudi Arabia's Vision 2030 - the Kingdom's long-term strategy to wean itself off oil revenues and diversify its economy.

Saudi Arabia previous year invited bids for a "utility-scale" 300 megawatt solar project, in a first for the world's top oil exporter.

"Up until now, progress in building solar capacity in the kingdom has been very slow, but this deal might give it the kick start it needs".

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Costing $200 billion, the facility would generate 200 gigawatts of power-about 100 times more than any other planned solar plant. The Crown Prince reportedly said, "It's a huge step in human history.It's bold, risky, and we hope we succeed doing that". It would in theory be fully built by 2030. About two-thirds of this energy was generated by natural gas and the rest by oil. The push into solar power is part of Saudi Arabia's ongoing strategy to reduce its dependence on fossil fuels. "We have great sunshine, land and great engineers and labour", Prince Mohammed told reporters in NY, as quoted by Bloomberg.

Softbank plans to invest roughly 950-million dollars in the project. SoftBank is said to have aimed to deploy as much as US$15 billion in a new city called Neom, which the crown prince plans to build on the Red Sea coast.

The Kingdom has accelerated the pace of deals in pursuit of the diversification targets of Price Mohammad Bin Salman Al Saud. The sale of about a 5 per cent stake in oil giant Saudi Arabian Oil Co is expected to provide more funds. He predicted that the project would add as much as $12 billion to the gross national product of Saudi Arabia. Each park will have a 25-year power purchase agreement, a long-term contract to supply electric power to customers, which is common in the solar energy industry.