Saudi Arabia, Softbank, sign $200bn deal to build world's largest solar park

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Saudi Arabia has signed a memorandum of understanding with Softbank Group to set up the world's largest solar project.

Reports suggest that SoftBank is probing what could be a shareholder-led smear campaign against two of its executives - Nikesh Arora (one-time heir apparent to SoftBank CEO Masayoshi Son) and Alok Sama (now the company's chief strategy officer).

The deal is just the latest in a number of announcements from Saudi Arabia, promising to scale up its access to renewable energy. The sale of about 5% of the oil giant Saudi Aramco is expected to provide additional funds.

"The Kingdom has a lot of sunshine, a great deal for land, and great engineers, labor and, most importantly, the best vision for development", said Masayoshi Son.

SoftBank was said to be planning to invest as much as $25 billion in Saudi Arabia over the next three to four years.

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

SoftBank's Son says to create world's biggest solar power company in Saudi Arabia
SoftBank and Saudi Arabia are creating a huge solar power generation project

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 $200bn, Son said.

Saudi's government has been attempting to wean the kingdom off its oil addiction and diversify its economy into different areas.

"If even part of that were to be built, it would drastically shift the trajectory of the solar market in Saudi Arabia", he said. Although the kingdom has been endeavoring to enter the clean energy sector for years, it started working on the first projects only in 2017, gathering offers for a 300-megawatt plant in October.

Softbank has also 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 and Foxconn.

Indeed, past year the corporation announced a joint tech fund, the Vision Fund, with the Saudi Arabian government. The remaining $10 billion could be in Saudi Electricity Company. The electricity demand in the country has grown by 9% a year since 2000.

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