New investment is going to heat things up in Saudi Arabia
Softbank, which is an investment company based in Japan, signed an MOU with Saudi’s Crown Prince Mohammed bin Salman’s on a $200bn project to power the kingdom with 200 GW using solar energy.
This project will span across the entire kingdom and deliver renewable power for the people. According to Bloomberg, the project will dwarf almost 6,000 projects in the US alone.
How is it going to happen?
“A huge step in human history,” said Prince Mohammed.
Saudi’s Crown Prince Mohammed and Masayoshi Son; chief executive of Softbank, both signed a memorandum of understanding.
Son said that he envisions the project will create 100,000 jobs and save as much as $40bn in power costs. He also added that: “The kingdom has great sunshine, great size of available land, great engineers, and great labor, but most importantly the best and greatest vision,” reported Bloomberg.
CNBC reported that first, two solar parks would be built by 2019, and will deliver 7.2GW of power.
Both parks will cost around $5b with Softbank investing $1b, the rest will be funded by project financing and will be the foundations that lead to more solar energy solutions to be built in the future.
The caveat is that both parks will not include batteries, for now.
The $200b will finance building the solar parks, incorporating batteries and constructing a vast facility that will integrate solar manufacturing, Son told CNBC.
This agreement is projected to increase Saudi’s GDP by $12b, by 2030.
Softbank is not so ‘soft.’
Son is known to have been promoting renewable energy since the 2011 Fukushima nuclear disaster, said Bloomberg, with recently completing a 50MW wind power farm in Mongolia.
Not only this, but Softbank has been a prominent investor in Saudi since last year, investing $15b in the $500bn 100% renewable city NEOM.
CNBC said that Saudi invested $45b in Softbank’s $100b Vision fund, which is another factor that solidifies their ties.
Although, there is a small issue here.
Nothing is certain.
While the memorandum is signed, It is worth noting that memoranda sometimes don’t result in anything happening, said Jenny Chase head of solar analysis at Bloomberg New Energy Finance.