TOKYO -- Saudi Arabia will construct one of the largest solar farms in the world on its sun-drenched soil by teaming with Japan's SoftBank Group, investing $200 billion to create a massive 200 gigawatts in power generation capability by 2030.
The solar farm project, announced Tuesday by the Middle Eastern kingdom. will be one of the largest that the world has ever seen, SoftBank Chairman and CEO Masayoshi Son told reporters in New York.
The planned 200GW of solar power exceeds Saudi Arabia's current generation capacity from all energy sources. It also translates to roughly triple the sum of all current solar construction projects around the globe. Even in 2030, when the project is scheduled to be completed, the solar farm will likely amount to 15% of total global solar capacity. The undertaking is expected to create 100,000 jobs.
The bulk of the expected $200 billion investment burden would be borne by the Saudi government, with just a small portion coming from the SoftBank Vision Fund, a roughly $100 billion vehicle that counts Riyadh as a major investor.
The fund, set up in May 2017, is chiefly aimed at forming a loose-knit network of companies geared toward the use of artificial intelligence and big data. At the end of last year, it had invested $20.8 billion in about 20 companies.
Saudi Arabia currently burns 300,000 to 800,000 barrels of oil per day for power generation, according to Reuters. If exported instead, that volume could reportedly add $7 billion to $20 billion to the country's annual oil revenue.
The solar farm project will benefit from the plunging cost of building solar facilities. For a smaller solar farm project last fall, Saudi Arabia awarded the contract to a bidder offering costs per kilowatt-hour of 1.786 cents, some one-eighth the typical costs in Japan today.
The International Energy Agency sees solar power's contribution to electricity supply rising sharply in the Middle East from practically zero today if the 200GW solar farm comes to fruition. But some skeptics point out that the ambitious project faces many hurdles to clear, including the massive funding needs.