• Reuters, Bloomberg


SoftBank Group Corp.’s Vision Fund will invest in a solar-power generation company in Saudi Arabia, creating the world’s biggest solar producer, as it steps up its involvement in the kingdom, its chief executive said Tuesday.

The project is expected to have the capacity to produce up to 200 gigawatts (GW) by 2030, SoftBank’s CEO Masayoshi Son told reporters in New York. That would add to around 400 GW of globally installed power capacity and is comparable to the world’s total nuclear power capacity of around 390 GW as of the end of 2016.

The initial phase of the project for 7.2 GW of solar capacity will cost $5 billion, with $1 billion coming from SoftBank’s Vision Fund and the rest from project financing, Son said.

The final investment total for the 200 GW of generation, including the solar panels, battery storage and a manufacturing facility for panels in Saudi Arabia, will eventually total around $200 billion, he said.

Last May, SoftBank announced it raised over $93 billion for the Vision Fund, the world’s largest private equity fund with backers including Saudi Arabia’s sovereign wealth fund, Apple Inc. and Foxconn Technology Co., formally known as Hon Hai Precision Industry.

Son is pursuing his vision of a future powered by interconnected devices and artificial intelligence. He established the Vision Fund, which, in conjunction with the Delta Fund set up to invest in Chinese ride-sharing firm Didi Chuxing Co., has funneled $27.5 billion into 20 tech firms as of the end of December.

Despite being one of the world’s sunniest countries, Saudi Arabia does not generate much power from solar, which makes up just a marginal amount of its largely oil-fired power production.

Son said he envisions the project as a way to help wean Saudi Arabia off its dependence on oil for electricity, create as many as 100,000 jobs and shave $40 billion off power costs.

Saudi Crown Prince Mohammad bin Salman is on a three-week tour of the U.S., his first visit since being designated the successor of his father, King Salman bin Abdul-Aziz al-Saud Salman. He and Son signed a memorandum of understanding in New York on Tuesday. The deal deepens SoftBank’s ties with the world’s largest crude exporter and advances the crown prince’s ambition to diversify Saudi Arabia’s economy.

“It’s a huge step in human history. It’s bold, risky and we hope we succeed doing that,” the crown prince said late Tuesday night as he left a news briefing at the Plaza Hotel.

“The kingdom has great sunshine, great size of available land and great engineers great labor, but most importantly, the best and greatest vision,” Son told reporters at the briefing.

SoftBank was said to be planning to invest as much as $25 billion in Saudi Arabia over the next three to four years. That’s a boost for Prince Mohammad, who’s been at the forefront of the Vision 2030 campaign to diversify the kingdom’s economy away from oil by that year. SoftBank is said to have aimed to deploy as much as $15 billion in a new city called Neom that Prince Mohammad plans to build on the Red Sea coast.

The Vision Fund is also said to plan investments of as much as $10 billion in state-controlled Saudi Electricity Co. as part of efforts to diversify the utility into renewables and solar energy, and SoftBank will also have some of its portfolio companies open offices in Neom.

“This fits in with Saudi Arabia’s push to restructure their economy and is not very surprising,” said Tomoaki Kawasaki, an analyst at Iwai Cosmo Securities Co. “What’s not clear is how much will this benefit SoftBank itself.”

The kingdom’s deal-making has quickened as it pursues Prince Mohammad’s diversification goals. Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, which has more than $224 billion in assets, spent about $54 billion on investments last year. The sale of about a 5 percent stake in oil giant Saudi Arabian Oil Co. is expected to provide more funds for investments.

Prince Mohammed met last week with U.S. President Donald Trump, who welcomed him to the White House. The U.S. and Saudi Arabia are developing an increasingly close partnership, encompassing everything from isolating Iran to bolstering business ties beyond energy into technology, defense and entertainment, according to top U.S. and Saudi officials.

He used his Washington visit to nurture contacts across party lines, meeting with both Republican and Democratic Congressional leaders in Congress. His tour is expected to include stops in San Francisco, Los Angeles and Houston.


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