RIYADH: Saudi Arabia’s Public Investment Fund (PIF) has reached an agreement with Richard Branson, the British entrepreneur and founder of Virgin Group, to invest at least $1 billion in his venture to create the world’s first commercial space travel service.
The deal was announced by Branson and PIF on the final day of the Future Investment Initiative in Riyadh. It was agreed between the entrepreneur — best known for his Virgin Airline — and Saudi Crown Prince Mohammed bin Salman.
It is the second major deal between Branson and the Kingdom, after his decision to back the Red Sea Project last month.
A joint statement said: “The PIF and Virgin partnership creates a strong platform to enhance the role of innovative technology within the Kingdom’s blueprint for a modern, diversified economy, which is a central part of Vision 2030.”
As part of the deal, Virgin could also help the Kingdom develop a space-themed leisure facility in one of the new resorts being planned in Saudi Arabia.
The deal will bring in $1 billion to three Virgin companies in the space business: Virgin Galactic, The Spaceship Company and Virgin Orbit.
They are all involved in the manufacture and launch of space vehicles for paying private passengers — what Virgin calls its “spaceline” from bases in the US.
The crown prince said: “This partnership with Virgin Group reflects the great strides the Kingdom is making toward our vision for a diversified, knowledge-based economy.
“The future of Saudi Arabia is one of innovation, as showcased at this week’s FII, and it’s through partnerships with organizations like Virgin that we will make active contributions to those sectors and technologies that are driving progress on a global scale.”
Branson said: “We are delighted to welcome the Kingdom of Saudi Arabia as our new partners under the leadership of His Royal Highness Mohammed bin Salman. We are now just months away from Virgin Galactic going into space with people on board and Virgin Orbit going into orbit and placing satellites around the Earth.
“This investment will enable us to develop the next generation of satellite launches and accelerate our program for point to point supersonic space travel.”
The deal — described as a “non-binding memorandum of understanding” — was signed by PIF Managing Director Yasir Al-Rumayyan and Patrick McCall, senior managing director of the Virgin Group.
It also allows for an option for PIF to invest a further $480 million in space services.
A Virgin adviser said that the space businesses were valued at $2.4 billion in the current fund-raising. PIF will be the third big investor in the project, alongside Virgin itself and Aabar Investments, the wealth fund owned by the government of Abu Dhabi.
The deal is subject to regulatory approval.
“The Virgin companies and PIF will cooperate to execute on a mutually agreed roadmap for Saudi Arabia’s space industry consistent with applicable laws, including US export controls,” a statement said.
The deal will also aid the development of next-generation low-cost small satellite launch systems and commercial supersonic point-to-point travel capabilities; and includes the “possibility to develop a space-centric entertainment industry in Saudi Arabia,” the statement said.