SoftBank Vision Fund (SBVF) has signed a memorandum of understanding that includes potentially taking a “significant” equity stake in Saudi Electricity Company (SEC).

The investment forms part of a wider proposal led by the Public Investment Fund (PIF) to create a New Solar Energy Plan 2030. This will initially see the PIF and SBVF, through SEC, develop 3GW of solar generation capacity in Saudi Arabia in 2018.

The MoU is non-binding, but the parties have committed to completing due diligence by 28 February 2018. The government would continue to be the main shareholder in SEC.

SBVF is backed by Saudi Arabia and Japan’s SoftBank, and is said to be the world’s largest private equity fund.

Solar power, together with wind energy, will be a prominent part of Saudi Arabia’s new $500bn city, Neom, announced on 24 October. The plan is to make the city a leader in solar energy, with the full supply chain, and the potential to export electricity.

Speaking on day one of the Future Investment Initiative in Riyadh on 24 October, Masayoshi Son, the founder of SoftBank, said the investment would help turn SEC into a next generation energy company.