Saudi Arabia signs $200bn solar deal with Japan's SoftBank

The world's biggest solar power project is coming to Saudi Arabia.

And it comes with a high price tag: around $200 billion. The venture, a partnership between Saudi Arabia and Japanese tech giant SoftBank, was revealed Tuesday, according to Bloomberg.

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Expected to be completed by 2030, the project will reach a colossal capacity of 200 gigawatts, SoftBank Chief Executive Masayoshi Son told reporters.

At 200 GW, the Saudi project would be approximately 100 times larger than the next proposed project, according to Bloomberg. That'd be Australia's proposed Solar Choice Bulli Creek PV Plant, which will have a capacity of 2GW.

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Currently, China's Tengger Desert Solar Park is considered the biggest solar farm in the world, with the capacity to produce 1,500 MW.

Crown Prince of Saudi Arabia Mohammed bin Salman Al Saud and Masayoshi Son sign a memorandum of understanding in New York on March 28. Credit: Bandar Algaloud / Saudi Kingdom Council / Handout/Anadolu Agency/Getty Images

It's a significant move for oil giant Saudi Arabia, the world's largest exporter of petroleum. This large-scale investment in solar power would reduce Saudi Arabia's reliance on oil, which is part of Saudi Crown Prince Mohammed bin Salman's Vision 3030 plan to diversify the country's revenue sources. (He's long criticized Saudi Arabia's oil addiction.)

According to Bloomberg, Saudi Arabia has a total power capacity of 77 GW (two-thirds natural gas, one third oil), which means 200GW would be way too much solar power for the country to use by itself. Hello, stored power exports.

And that $200 billion? Seems a hefty sum, but it'll reportedly cover the solar panels and battery storage, along with a manufacturing plant to make said panels. The first $5 billion 7.2 GW phase will be driven by $1 billion from SoftBank’s long-term investment Vision Fund, then the rest by what Son referred to as "project financing."

The first of the two solar parks will begin construction this year, and will start rolling out electricity by 2019.

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