SoftBank Vision Fund (SBVF), the world’s largest private equity fund and backed by Japan’s SoftBank Group, has this week signed a Memorandum of Understanding (MoU) with Saudi Arabia’s Public Investment Fund (PIF) – which owns a 74% stake in Saudi Electricity Company (SEC) – to fund the development of 3 GW of solar PV and storage capacity in Saudi Arabia.
SEC, the state-backed energy company of Saudi Arabia, is thought to be worth an estimated $100 billion and is 7% owned by Saudi Aramco, the nation’s oil giant. In a press release published on its website, it confirmed that the 3 GW solar project will be constructed in 2018, with PIF and SBVF creating manufacturing facilities for solar components and batteries in Saudi Arabia.
Further details are not forthcoming at this stage, but suffice to say the MoU is non-binding and represents the first step of a potentially lengthy but potentially lucrative project.
Last month, French firm EDF won a tender to develop large-scale solar capacity in Saudi Arabia for a world-record low price of 0.06697 SAR ($0.0178)/kWh. The tender, issued by the Saudi Renewable Energy Development Office (REPDO) will bring 300 MW of solar online.
SEC’s proposed PV project, however, dwarfs that figure, and if realized next year would meet one-third of Saudi Arabia’s National Renewable Energy Program’s (NREP) 2023 target of 9.5 GW of renewable energy generating capacity.
The Government of Saudi Arabia would, through SEC, retain a controlling share of this proposed solar and storage project, and will “provide SBVF with any level of support” it would require to develop the plant(s), SEC said in the statement.