International media reports say Saudi Arabia and SoftBank Group Corp. have signed a memorandum of understanding to build a solar power development that’s exponentially larger than any other project.
Bloomberg reports that SoftBank founder Masayoshi Son, known for backing ambitious endeavors with flair, unveiled the project on March 27 in New York at a ceremony with Saudi Crown Prince Mohammed Bin Salman.
Saudi Arabia, which is the world’s largest crude exporter, is seeking to diversify the economy and wean off a dependence on oil.
At 200 gigawatts, the Softbank project planned for the Saudi desert would be about 100 times larger than the next biggest proposed development and a third more than what the global photovoltaic industry supplied worldwide last year, according to data compiled by Bloomberg New Energy Finance.
According to CNBC, the first two solar parks will be able to generate 7.2 gigawatts of power and are scheduled to begin construction this year and start generating electricity in 2019.
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.
Son said revenues from early stage solar parks will help fund the construction of future projects in the kingdom. 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.
The first parks will not include battery storage, but the new Saudi electricity generation company will begin adding that feature to solar farms within two to three years, according to Son.
The estimated $200 billion project cost reportedly includes building the solar parks, integrating battery technology and constructing a massive new facility that will vertically integrate solar equipment manufacturing. The venture also plans to build centers for research and development and education and training.
The growth of the solar industry is expected to create 100,000 jobs and increase Saudi gross domestic product by $12 billion, CNBC says. It is also expected to save the kingdom $40 billion by obviating the need to burn domestically produced oil to generate power.
