A $200-billion solar power project that was planned to be the largest solar farm in the world might never happen, government sources from Riyadh told the Wall Street Journal.
The Kingdom earlier this year announced the funding and a partnership with Japanese SoftBank as part of its Vision 2030 economic reform plan that also involves a US$500-billion smart city project.
The solar project would have had installed capacity of 200 GW by 2030 and could have created as many as 100,000 jobs. However, the WSJ sources said, nobody is working on the project and the government is planning another set of renewable energy initiatives, to be made public later this month. Those new initiatives, the sources added, would be more practical.
While some might see the news as a decision made due to changing circumstances—oil prices, for one—others would not need long to recall the shelving of what was to be the biggest IPO in history, of Saudi Aramco. Initially scheduled for the second half of this year, the listing was delayed several times before the delay became indefinite.
Following the oil price collapse from 2014, Saudi Arabia’s Crown Prince spearheaded a reform drive along with the implementation of some austerity measures that ruffled some public service feathers but were quickly removed once prices began climbing back up. The multibillion-dollar projects are the foundation of this drive. Besides the solar megafarm, there is also the NEOM smart city project, estimated to cost US$500 billion to build.
Earlier this month, the team responsible for the NEOM project, which, by the way should become a tourist magnet, said they had begun environmental, archaeological, and geological surveys of the area where the city should be located.
Earlier, the project’s CEO, Klaus Kleinfeld, told media that "The investment case for NEOM is actually very easy to make, because we've got so many things going for us," adding that there was “overwhelming” enthusiasm from investors interested in financing the project. Time will probably show how much truth there was in that statement.
By Irina Slav for Oilprice.com
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