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Herald Economist

Saudi Arabia’s just Struck Oil, Again, only this time it’s Called Solar

Saudi Arabia, the world’s biggest oil exporter, has teamed up with Japan’s Softbank Group on a multi-billion solar power project for the Kingdom. It will be the world’s largest and the first phase of the project, beginning in 2018, will cost around US$5bn, with 7.2 gigawatts of power being generated in 2019. The huge project will be partially bankrolled by the massive $93 billion SoftBank Vision Fund, of which Saudi Arabia is the biggest backer.

The aim is to invest US$200 billion by 2030 to generate about 200 gigawatts from the series of giant solar parks, which would provide enough for 150million homes.

“It’s by far the biggest solar project ever’’, said  SoftBank chief executive Masayoshi Son at a news conference in New York, after signing a non-binding agreement with Saudi Arabia’s Crown Prince Mohammed bin Salman.

The project is so big that it’s expected to take more than a decade to finish. Its massive scale will create entire industries in Saudi for the manufacturing and installation of solar equipment.

That will include training facilities and a research and development center “so the new technology will continue to evolve,” Son said.  The project will eventually generate 200 gigawatts of energy, far more than any existing solar project. It would provide enough electricity to simultaneously power about 20 billion LED light bulbs.

Prince Mohammed, who is aiming to grow Saudi’s business away from just oil, said it was a “huge step in human history”. Saudi Arabia’s public investment fund and the SoftBank Vision Fund will put up between 10 and 20% equity investment for each solar park, it was reported. The rest of the funds will come through project financing.

The plans aren’t set in stone, though. Son and bin Salman signed a memorandum of understanding for the project rather than a formal, binding agreement. Last year, Saudi Arabia pledged $45 billion to invest in technology companies around the world. It’s also trying to create a thriving startup scene at home.

The new solar project will involve the construction of solar parks throughout Saudi Arabia and a large battery to store the energy generated by the panels.  Son estimated that the project will create 100,000 jobs and save Saudi Arabia $40 billion in power generation costs. He also predicted it would add $12 billion to the country’s gross domestic product, although he didn’t say over what period.

Installation of the solar panels is planned to start this year, and the project should start producing electricity by the middle of next year.  The first solar panels will be imported from an established manufacturer, Son said, but all the equipment for the project will be manufactured in Saudi Arabia after the first couple of years.

If you wish to learn more about these exciting developments mark your calendars for this upcoming event.

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About the author

Anita Gooding

Anita Gooding

My name is Anita, and I'm a UC Berkeley alumna and currently based in Minnesota but from the United Kingdom.
I have been actively involved in political reportage since the days of Bill Clinton in the White House and have always kept tabs on political events in the United Kingdom and the European Union at large. I take special delight in covering the activities of frontline politicians in the US and EU
I joined the Herald Reporter’s team of correspondents in October 2017 out of my passion for journalism to cover US and EU evolving and trending political news.

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