Saudis invest $1.4 billion in Virgin space projects
SAUDI ARABIA/US: Saudi Arabia is planning to invest US$1 billion (NZ$1.4b) in Sir Richard Branson’s space businesses at a crucial stage in its development.
Speaking at the Future Investment Initiative (FII) summit in Riyadh, the billionaire entrepreneur, said the kingdom’s money would be used to fund his US-based Virgin Galactic, Spaceship Company and Virgin Orbit ventures.
The deal - which is a nonbinding memorandum of understanding - needs to be signed off by the US government. The agreement is just one of a series of plans to come out of this week’s FII event - nicknamed ‘‘Davos in the Desert’’ - which is part of the Saudi government’s attempt to move the economy away from oil by using the money it has made from its huge -reserves to build other industries.
Others schemes include plans to construct a US$500b business and -industrial zone in the northwest of the country.
Branson said: ‘‘This investment is a sign of confidence from the international investment community that our vision, our approach and our technology are the right path to commercialising space access.’’
He said Virgin’s VSS Unity spaceplane and LauncherOne rocket were ‘‘poised to reach significant technical milestones in the run-up to launch’’.
Branson added that the companies are ‘‘eager to build out our R&D and US -facilities to support next generation -vehicles and services’’. A cash injection from Saudi Arabia will be used to help accelerate this.
Branson said that the businesses are ‘‘just months away from sending people into space and Virgin Orbit placing satellites around the Earth’’. Last year Virgin Galactic won a licence from US aviation regulators to fly paying passengers into space once another round of safety checks are passed. In 2014 a test flight ended in tragedy when Virgin’s SpaceShipTwo broke up in flight, killing one of its -pilots.
Backing from Saudi Arabia could also help in the development of what Branson called ‘‘a spacecentric -entertainment industry’’ in the Gulf nation. Funding would be funnelled to the Virgin space companies through Saudi Arabia’s Public Investment Fund sovereign wealth fund, in which Crown Prince Mohammad bin Salman takes an active interest. Despite the size of the investment, the PIF would only be a minority shareholder, according to Branson, and the companies would remain based in southern California and New Mexico.
The Crown Prince said the Virgin tie-up highlighted his country’s drive towards creating a less oil dependent economy. ‘‘The future of Saudi Arabia is one of innovation,’’ he said. ‘‘It’s through partnerships with organisations like Virgin Group that we will make active contributions to those sectors and technologies that are driving progress on a global scale.’’ - Telegraph Group