Shelves in Saudi Arabia Work on the $ 200 billion Solar Project of SoftBank

DUBAI-Saudi Arabia has suspended a plan of $ 200 billion with

SoftBank Group

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to build the world's largest project in the field of solar power generation, Saudi government officials said, another remarkable transformation project in the kingdom.

The stalled solar project means a setback for a partnership between Saudi Arabia and SoftBank that has ambitious ideas. Together they have created a $ 100 billion fund for investments in technology companies, which has led to a deluge of new money flowing to startups.

The solar energy project would have turned the world's foremost oil producer into a giant in solar energy and eventually generate about 200 gigawatts of energy, more than three times the daily needs of the country. The plan was announced last March by the president of the SoftBank, Masayoshi Son and crown prince Mohammed bin Salman in New York and was to be an extension of their partnership.

Now, officials and a Saudi government advisor said no one is actively working on the project.

Instead, officials and advisor said that the Saudi kingdom is working on a broader, more practical strategy to stimulate renewable energy, announced at the end of October around the time of an investment conference in Riyadh. The announcement will help resolve the confusion created by the SoftBank plan and clarify the renewable energy objectives of the kingdom, said a Saudi official.

The development of solar energy generation is the latest high-profile project that Saudi Arabia has reconsidered after further consultation. Riyadh announced in 2016 that it would raise $ 100 billion by posting Saudi Arabian Oil Co., known as Aramco, publicly, but later postponing the IPO.

"It's easy to swing or attract attention" with the $ 200 billion SoftBank-led project, said a senior adviser to the Saudi government. "But difficult to execute a performance."

SoftBank declined to comment. Representatives from the Saudi government did not respond to requests for comments.

The solar project was intended as part of the economic and social transformation that once took place in Saudi Arabia. Under the 33-year-old prince Mohammed, the kingdom has abolished the world's only prohibition on driving women, has given the first theaters in decades to open and has taken steps to control the influence of extremist religious views. to decrease.

The project was intended to expand a partnership between Saudi Arabia and SoftBank. Together, the State Financing Fund and SoftBank of the kingdom have already unveiled a $ 100 billion venture, known as the Vision Fund, to invest in new global technologies and companies.

Although the solar project had a high price tag of $ 200 billion, the first phase consisted of an investment of $ 1 billion by the Vision Fund this year. It had to produce about 7.2 gigawatts within two years and the total capacity of 200 gigawatts by 2030, Mr Son said in March.

The Vision Fund has not disclosed whether it has already invested money in the Saudi project.

Saudi energy officials had not decided on the most important details of the solar project, such as the land that would be used; the structure of the development or that it would receive subsidies from the state, said a Saudi energy officer and advisor who were familiar with the matter.

"Everyone just hopes that this whole idea would die," said the Saudi energy official.

Building such a large capacity can now mean that Saudi Arabia is blocking a price of development that in the future will seem expensive with the arrival of new technologies, said another official. The project and the 200 gigawatt target were considered a loose agreement and potential ambition, no explicit obligation to generate that amount of capacity by 2030, and it is not clear whether the created power could be exported to other countries, the same official added.

The framework that will be announced in October does not prevent SoftBank from being involved in the construction of solar power in the future, but it will probably not be the development of a gigantic project of 200 gigawatts, the official addition.

With vast desert plains and abundant sunshine, Saudi Arabia has long sought a switch from a global oil producer to a solar-powered player, but its plans have in the past been faced with high costs and logistical problems.

Prior to the agreement with SoftBank, Saudi Arabia's energy ministry had started a solar and wind energy generation program with the aim of producing a modest 9.5 gigawatt stream in 2023, consisting of about 10% of the total capacity in the kingdom. In February, the ministry offered 300 megawatts of the 2023 target, and issued a contract to a local private company to develop and produce solar energy at one of the lowest prices worldwide for the end consumer. Saudi Arabia currently has almost no production of solar energy and produces its electricity by burning crude oil, diesel and gas.

Mr. Son has announced large global renewable projects in the past that do not meet the original ambitious goals. After the earthquake and tsunami that devastated Japan in 2011 and caused a meltdown, Mr. Son said that SoftBank would build enough megasolar power plants to help make up for about 50 gigawatts of nuclear power capacity, but has not yet reached that goal.

Write to Rory Jones on [email protected] and Summer Said on [email protected]

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