30 October 2017 News

Virgin Group and Saudi Arabia announce $1 billion deal

Virgin Galactic's first SpaceShipTwo during its first supersonic powered flight. Image: MarsScientific.com/Virgin Galactic
Virgin Galactic's first SpaceShipTwo during its first supersonic powered flight. Image: MarsScientific.com/Virgin Galactic

Richard Branson’s Virgin Group and Saudi Arabia have announced a partnership worth $1 billion to boost space tourism on the Red Sea as part of the states Neom project and other significant ventures.

Neom is a $500 million Red Sea project set in a coastal lagoon stretching along more than 150 kilometres of unpopulated coastline and covering some 50 untouched islands, with nearby mountains up to 2,500 metres high. Neom has been described as the “worlds most ambitious project, that is unrivalled in concept and is a place on earth like nothing on earth.”

“Branson has become the first international investor to commit to involvement in the Red Sea Project and nearby Al Ola/Madain Saleh, another prime site for the development of tourism, both domestic and international,” said the Saudi government.

The investment into the Virgin group would also see Branson’s suit of space companies provide suborbital space tourism flights from the Saudi capital, along with satellite launches and ultra-fast transport systems. There is also an option for an additional investment of $480 million at a future date.

Under the deal, the Saudi Arabian Public Investment Fund (PIF), would take “a significant stake in Virgin Galactic, The Spaceship Company and Virgin Orbit, alongside Virgin Group and Abu Dhabi’s Aabar Investments,” according to a press release by the company. Nonetheless, Virgin will still retain the majority interest in the three space companies.

PIF is headed by the Crown Prince Mohammed bin Salam Al-Saud who is overseeing the project and it has been reported that Neom will not be governed by Wahhabism, a strict Islamic code that has limited social and political actions in Saudi Arabia.

“The partnership with Virgin Group reflects the Kingdom’s steps towards our vision to develop a diversified and knowledge-based economy,” the Crown Prince said in a statement. “The Kingdom’s future is an innovation-based future which is jumped out at the Future Investment Initiative (FII) Forum. We will work with companies at the level of Virgin Group to make effective achievements in sectors and technologies that accelerate progress at the global level.”

“It’s an exciting time to invest in Saudi Arabia,” said the Virgin Group founder at the Future Investment Initiative (FII) forum held in Riyadh last week when the announcement was made. “We are now just months away from Virgin Galactic sending people into space and Virgin Orbit placing satellites around the Earth. This investment will enable us to develop the next generation of human spaceflight, more economic satellite launches and accelerate our programme for trans-continental point-to-point space travel,” said Branson.

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