Saudi Arabia, SoftBank Announce World’s Biggest Solar Power Project
Japanese telecom giant SoftBank and Saudi Arabia announced on Tuesday the world’s biggest solar power generation project at a press conference in New York.
The project was estimated to cost $200 billion through 2030. That’s about how long it will take to develop all 200 gigawatts of the project. In addition, It would generate enough electricity to power around 20 billion LED light bulbs at the same time.
There are roughly 70 gigawatts of solar capacity in operation, under construction or in development in the US, according to a data kept by the Solar Energy Industries Association. Further, the new project will construct solar parks throughout Saudi Arabia and a large battery. This will store the energy generated by the panels.
Meanwhile, the project will support the creation of a domestic solar equipment manufacturing industry in the kingdom, said SoftBank CEO Masayoshi Son.
That will include training facilities and a research and development center “so the new technology will continue to evolve,” Son said.
Additionally, Son projected that the project will produce 100,000 jobs and save the country $40 billion in power generation costs. It would also add $12 billion to the county’s gross domestic product, though he didn’t say what period.
The massive $93 billion SoftBank Vision Fund will partially bankroll the huge project. Saudi Arabia is the biggest backer.
The initial investment is $5 billion, of which $1 billion will come from the SoftBank fund. The rest will come from loans that will be paid off through revenue generated by selling electricity from the vast solar project, Son said.
However, as the project is in the early phases, development is not yet a guarantee. Saudi Crown Prince Mohammed bin Salman and Son signed a memorandum of understanding. This will kick start the process of forming a new power generation company. The intention is to complete due diligence on the project by the end of May.
“This Kind of a project would never have been feasible without the big vision we shared with the crown prince,” Son said.
“The kingdom has great sunshine, great size of available land, great engineers, great laborers,” he said. “But most importantly, it has the greatest vision.”
Softbank shares dropped 4.01% to 7,922.00 at the Tokyo Stock Exchange.
Saudi Arabia’s Vision 2030
The company was said to be planning to invest as much as $25 billion in Saudi Arabia over the next 3 to 4 years. This will boost Prince Mohammed’s Vision 2030 campaign to diversify the kingdom’s economy away from oil by that year.
According to sources, Softbank also have aimed to deploy $15 billion in a new city call Neom. The crown prince plans to build the new city on the Red Sea coast.
Moreover, The company’s Vision Fund plans to make $10-billion investment in state-controlled Saudi Electricity Co. It’s an effort to diversify the utility into renewables and solar energy.
“Softbank seeks investment and Saudi needs energy, so it may make sense to sort the financing out in a large block and then separately hammer out the phases and the technical details,” said Jenny Chase, head of solar analysis at BNEF.
“It is worth noting that many of these memorandums of understanding do not result in anything happening.”