The deal announced Wednesday is the first major one in Saudi Arabia. While the kingdom has for years sought to get a foothold in clean energy, it's was only in 2017 that ministers moved forward with the first projects, collecting bids for a 300-megawatt plant in October.
The Crown Prince and the Softbank CEO said they expect the solar project to have the capacity to produce up to 200 gigawatts by 2030. "It's a great step and is bold, risky".
If it is built, the solar park will increase almost three times the capacity of Saudi Arabia to produce electricity, reaching 77 gigawatts in 2016. About two thirds of that is generated by natural gas, with the rest coming from oil.
Part of the investment will come from Softbank's $93bn Vision Fund, the largest ever private equity fund of which Saudi Arabia is the largest backer.
The entire project cost is expected to run to US$200 billion, with the first phase costing US$5 billion. "The Kingdom has great sunshine, great size of available land, great laborers, and great engineers", "But most importantly it has the greatest vision", Son added.More news: North Atlantic Treaty Organisation withdraws accreditation of 7 Russian diplomats
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Saudi's government has been attempting to wean the kingdom off its oil addiction and diversify its economy into different areas.
SoftBank CEO Masayoshi Son established the Vision Fund, in concurrence with the Delta Fund set up to invest in Chinese ride-hailing firm Didi Chuxing, has funnelled $27.5 billion.
From past year, Softbank is planning to work on several projects with Saudi Arabia which includes developing a new business "Neom" and industrial city in the country.
The development would start this year with a $1 billion investment from the joint Saudi-SoftBank Vision Fund, said Masayoshi Son, chief executive of SoftBank.
The Public Investment Fund (PIF) invested about $54 billion a year ago according to data from the Sovereign Wealth Fund Institute.