The shelves of Saudi Arabia work on the $ 200 billion SoftBank solar project
The shelves of Saudi Arabia work on the $ 200 billion SoftBank solar project
to build the world's largest solar power generation project, Saudi government officials said, in a complication for another striking transformation project in the kingdom.
The stalled project marks a setback for an association between Saudi Arabia and SoftBank that has pursued ambitious ideas. Together, they have created a $ 100 billion fund for technology company investments that has resulted in an avalanche of new floods of money in startups.
The project would have turned the world's largest oil producer into a giant of solar energy, which will ultimately generate some 200 gigawatts of energy, more than three times what the country needs every day.
The plan was announced by SoftBank CEO Masayoshi Son and Crown Prince Mohammed bin Salman in New York last March, and it was supposed to be an extension of their partnership.
In a statement issued on Monday, the Saudi Public Investment Fund said the kingdom is still working on large-scale multi-billion dollar solar projects with SoftBank and others. "These plans to develop a leading champion for the industry are ongoing and in line with the schedule that would be anticipated for projects of this scale and ambition," the fund said.
But Saudi officials and an adviser to the Saudi government said no one is actively working on the project.
Instead, officials and adviser said the Saudi kingdom is developing a more comprehensive and practical strategy to boost renewable energy, which will be announced in late October at the time of an investment conference in Riyadh.
The announcement will help clarify the kingdom's renewable energy goals, a Saudi official said.
The development is the latest high-profile project that Saudi Arabia has reconsidered after an additional consultation. Riyadh in 2016 announced that it would raise up to $ 100 billion by listing the Saudi Arabian Oil Co., known as Aramco, on the stock exchange, but later postpone the IPO.
"It's easy to dominate or get one's attention" with the project led by SoftBank, said a senior adviser to the Saudi government. "But difficult to do any execution".
SoftBank declined to comment.
The solar project was meant to be part of the economic and social transformation from one generation to the next in Saudi Arabia.
Under Prince Mohammed, 33, the kingdom has raised the only driving ban women, permitted The first theaters in decades. to open and make moves to diminish the influence of extremist religious views.
Together, the kingdom's sovereign wealth fund and SoftBank had already presented a $ 100 billion company, known as the Vision Fund, to invest in new technologies and global companies.
Although the solar project had a high price tag, its first phase consisted of an investment of $ 1 billion by the Vision Fund this year.
It was to produce approximately 7.2 gigawatts in two years and the total capacity of 200 gigawatts by 2030, Son said in March.
The Vision Fund has not disclosed whether it has invested cash so far in the Saudi project.
The Saudi energy officials had not decided on the key details of the solar project, such as the land that would be used; The development structure or would receive subsidies from the state, said a Saudi energy official and a consultant familiar with the matter.
"Everyone is waiting for this whole idea to simply die," the Saudi energy official said.
The construction of such a large capacity could now mean that Saudi Arabia will block a development price that will seem expensive in the future with the advent of new technologies, said another official.
The project and the goal of 200 gigawatts were considered a flexible agreement and a potential ambition, not an explicit commitment to generate that amount of capacity by 2030, and it is not clear if the energy created could be exported to other countries, the same official. additional.
The official added that the framework that will be announced this month will not prevent SoftBank from participating in the construction of solar power generation in the future, but it is not likely to lead to the development of a massive project of 200 gigawatts.
With vast desert plains and abundant sunlight, Saudi Arabia has long sought to move from the world oil producer to the solar energy player, but its plans have faced high costs and logistical problems in the past.
Prior to the agreement with SoftBank, Saudi Arabia's energy ministry had initiated a solar and wind generation program with the goal of producing a modest 9.5 gigawatts of energy by 2023, which consists of approximately 10% of the total capacity in the kingdom.
The ministry tendered 300 megawatts of the 2023 target in February, awarding a contract to a local private company to develop and produce solar power at one of the lowest prices in the world for the final consumer.
Saudi Arabia currently has almost no solar power generation and produces its electricity by burning crude oil, diesel and gas.
Mr. Son has a history of announcing massive renewable energy projects around the world that do not meet the initial sweep objectives.
After the earthquake and tsunami that devastated Japan in 2011 and caused a nuclear collapse, Mr. Son said that SoftBank would build enough megasolar power plants to help offset a nuclear power capacity of approximately 50 gigawatts, but the conglomerate has not yet arrived that objective
-Mayumi Negishi in Tokyo contributed to this article.
Write to Rory Jones in rory.jones@wsj.com and Summer Said in summer.said@wsj.com
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