Japan’s SoftBank Group Corp and Saudi Arabia’s Public Investment Fund have been carrying out early talks with banks about potential funding for a multi-billion dollar solar power project planned in the Kingdom, said sources familiar with the matter.
The talks follow an agreement, signed and announced in March, between PIF and SoftBank to create the New Solar Energy Plan 2030, the world’s largest project of its type, reported Reuters.
Saudi Arabia is embarking on a huge push to transform its economy and reduce its dependence on oil.
Being one of the world’s biggest oil exporters, Saudi Arabia’s rulers view solar power as a way to cut the amount of crude it uses to generate power at home and raise its overseas shipments.
The two parties have started preliminary talks in the past few weeks with Saudi Arabian and some international banks to assess which financing tools would be available for a project of that size, one of the sources said, Reuters reported.
Other source described the discussions as an unofficial sounding-out of banks.
At the time of the announcement in March, SoftBank Chief Executive Masayoshi Son said the project was expected to have the capacity to produce up to 200 gigawatts (GW) by 2030, adding to around 400 GW of globally installed solar power capacity.
The initial phase of the project, for 7.2 GW of solar capacity, will cost five billion dollars, with one billion dollars coming from SoftBank’s Vision Fund and the rest from project financing, Son said.
The final investment total for the entire project will eventually total around $200 billion, he added.
He said that manufacturing solar panels within the Kingdom will take place to serve the giant project ion addition to exploring further opportunities in the future to market these homemade panels to local and international markets.
The projects resulting from the plan will contribute to the creation of around 100,000 jobs in the Kingdom as well as raising Saudi Arabia's gross domestic product by about $12 billion, the Saudi Press Agency reported.
Last May, Softbank said it raised over $93 billion for the Vision Fund, the world’s largest private equity fund with backers, including PIF and Apple Inc.
