SoftBank’s chairman Masayoshi Son and Saudi Arabia’s prince Mohammed bin Salman have just signed a Memorandum of Understanding to develop the world’s largest solar power project.
|SoftBank shakes hand with Saudia Arabia to develop the world's largest solar power project (Source: Bloomberg) |
At the signing ceremony in New York yesterday, Son said the solar plants will run the gamut from power generation to panel and equipment manufacturing as a way to help Saudi Arabia free itself of it dependence on oil. The 200GW plants will create 100,000 jobs and save $40 billion in power costs, as well as help rise the kingdom’s GDP by $12 billion.
“The kingdom has great sunshine, great size of available land, and great engineers, great labour, but most importantly, the best and greatest vision,” Son added.
|The deal extends SoftBank’s ties with the world’s largest crude oil exporter as well as advances Saudi ambitions to diversify the country’s economy. |
“It is a huge step in human history. It is bold, risky, and we hope we will succeed,” Prince Mohammed said at the ceremony.
The project's first two plants are expected to be constructed within this year and put into operation in 2019. They carry an investment capital of $5 billion, including $1 billion from SoftBank Vision Fund.
According to Son, the first phase of these plants will create the capital to develop the future plants through a 25-year power purchase agreement for each plant.
SoftBank also talked about plans to invest as much as $25 billion in Saudi Arabia over the next three to four years, including $15 billion to work in a city named Neom that Prince Mohammed plans to build on the coast of the Red Sea.
SoftBank Vision Fund is planning to pour $10 billion into state-controlled Saudi Electricity Corporation as part of efforts to diversify the utility into a renewable and solar energy provider, and SoftBank will have some of its portfolio companies open offices in Neom.