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Thu 26 Oct 2017 09:50 AM

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Saudi PIF, Softbank sign solar energy agreement

The MoU with the SoftBank Vision Fund will see the development of a 3-GW solar energy capacity in 2018

Saudi PIF, Softbank sign solar energy agreement
Saudi Crown Prince Mohammed bin Salman (centre), US journalist Maria Bartiromo (left) and Masayoshi Son. the CEO of SoftBank attend the Future Investment Initiative FII conference in Riyadh Photo: FAYEZ NURELDINE/AFP/Getty Images.

Saudi Arabia’s Public Investment Fund (PIF) and the SoftBank Vision Fund have signed a Memorandum of Understanding (MoU) to create a 'Solar Energy Plan 2030' for the kingdom.

Signed during the Future Investment Initiative (FII) in Riyadh, the new initiative includes an agreement to develop Saudi Arabia’s first 3-Gigawatt solar generation capacity in 2018. This will take place through the Saudi Electricity Company (SEC), which is 74.3 percent owned by PIF.

Additionally, as part of the agreement both parties will explore the possibility of the SoftBank Vision Fund taking a significant minority equity stake in SEC, and will work to identify potential opportunities to establish solar and battery manufacturing ecosystems in the kingdom, which in turn will support sector diversification and job creation.

“Rapid technology advancement and scale have transformed solar power into an attractive source of electricity,” said Masayoshi Son, chairman and CEO of SoftBank Group Corporation.

“As the kingdom is blessed with limitless sunshine, we are very excited to work together with PIF to build a world-leading solar plant, develop an advanced solar and battery manufacturing ecosystem, and bring high tech jobs to the kingdom,” he added.

In May, the Softbank Vision Fund announced its first major close with over $93 billion of committed capital. Aside from Softbank Group Corp. and PIF, other investors in the fud include the UAE’s Mubadala, Apple, Foxconn Technology Group, Qualcom and Sharp.

The development of Saudi Arabia’s solar energy sector is one of the primary objectives of Vision 2030, with the country targeting 9.5 GW of renewable energy by 2023.

According to a report by Bloomberg New Energy Finance, funding for clean energy rose 40 percent over Q3 2017 to $66.9 billion compared to the same period a year.

In Saudi Arabia, 30 solar and wind power projects are being constructed over the next 6years as part of a $50 billion programme.

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