Saudi Arabia to create world's biggest solar power firm

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Japanese telecom investor Softbank and Saudi Arabia, announced the world's biggest solar power generation project at a press conference in NY. It would in theory be fully built by 2030.

Expanding into renewable energy is a key part of Saudi Arabia's Vision 2030, a plan spearheaded by Prince Mohammed to diversify the nation's oil-dependent economy.

The initiative will be backed by Softbank's Vision Fund technology investment vehicle, with a first 7.2GW phase costing $5bn, Son said.

SoftBank founder Masayoshi Son has a penchant for backing ambitious projects and the latest project to win his stamp of approval is what's billed as the "world's largest solar farm".

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"You have never seen something of this scale", he is reported as saying. The announcement took place during Crown Prince Mohammed bin Salman's trip across the United States.

By the numbers: now, the biggest planned solar facilities promise to generate up to 2 gigawatts of power.

"The kingdom has great sunshine, great size of available land, great engineers, great laborers", he said. Each park will have a 25-year power purchase agreement, a long-term contract to supply electric power to customers, which is common in the solar energy industry.

Mr Son said he envisions the project, which runs the gamut from power generation to panel and equipment manufacturing, will create as many as 100,000 jobs and shave US$40 billion off power costs. Adding 200 GW would create enormous excess capacity that could be exported to neighbours or used by industry, although the kingdom will still require other forms of power generation for night-time back-up. Saudi Arabia's sovereign wealth fund, the Public Investment Fund, which has more than US$224 billion in assets, spent about US$54 billion on investments past year. At $93 billion it's not large enough to pay for the mammoth solar project, but it's thought the fund will contribute to some of its costs. With a $45 billion investment, it is the largest investor in SoftBank's Vision Fund. Electricity demand in the country has risen by as much as 9 per cent a year since 2000, according to BNEF.

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