by Douglas Messier
Saudi Arabia’s non-binding agreement to invest $1 billion in Richard Branson’s three space companies is part of a broader set of ventures that includes Branson’s Virgin Group investing in a new mega city on the Red Sea and suborbital space tourism flights from the Saudi capital.
“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,” the Saudi government proudly announced on Oct. 1, more than three weeks before the space deal was unveiled.
The $500 million Red Sea Project, known as Neom, involves the development of 150 km of unpopulated coastline that includes a lagoon and 50 islands.
“The remote area, far from any of the Kingdom’s urban centers, is set to become a destination for both local and international tourists, with rules and regulations on par with those at other popular resort areas around the world,” the government said. “The project will comprise exquisite luxury resorts, underwater nature reserves and dormant volcanoes within an area of 34,000 km² [13,127 miles²].”
Branson toured Saudi Arabia at the end of September, during which he viewed the future site of Neom while wearing a red and white checkerboard Shemagh on his head.
“I was amazed at how completely untouched the landscape is,” Branson said. “Standing on the islands, we could see turtles pulling themselves in and out of the water to lay their eggs, while eagle rays and dugongs swam past. Given the right protections, it could stay that way for decades to come.”
During an appearance in the Saudi capital last week, Branson said he had accepted an offer to be on boards of the Neom project and one or two other projects.
A Reformist Crown Prince
Neom will not be governed by Wahhabism, a strict Islamic code that has limited social and political actions in Saudi Arabia.
Crown Prince Mohammed bin Salam Al-Saud is overseeing the project as head of the government’s Public Investment Fund (PIC), the same fund that signed the non-binding MOU with the Virgin Group.
The PIC “will inject initial investments into the project and start partnerships with international companies to spur development of resort hotels and other amenities,” according to a government press release. “Another tenet of Vision 2030 is the formation of public private partnerships (PPPs) aimed at diversifying the Saudi economy and reducing the country’s reliance on oil.”
The reformist Bin Salem was recently named heir to the Saudi throne. He has pledged to turn the country away from Wahhabism and modernize the absolute monarchy, a move that Branson praised in a blog post published last month.
“It was quite an experience to be there on the day that women were given the right to drive for the first time,” Branson wrote. “In a country where women’s rights still lag behind the West, this was a huge announcement and a much-welcomed sign of progress and one welcomed by every woman we met.
“From the vantage point of a foreign observer, much of this may appear too little, too slow. But I understand what Prince Muhammad is trying to do, and I think it is an enormously difficult job to promote change while reconciling the various forces that seek to pull this vast country in very different directions,” Branson added.
Where will the money for Neom come from? Saudi Arabia is planning a initial public offering (IPO) in the state-owned oil company, Aramaco. Estimates for the value of Aramco range from $1 trillion to $10 trillion.
Virgin Deal Could Total $1.5 Billion
PIF’s non-binding agreement with Virgin includes an investment of $1 billion, with the option for an additional investment of $480 million at a future date.
Under the deal, 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.
“This will support the companies’ human spaceflight plans and accelerate Virgin Orbit’s manufacturing and operational capabilities,” the statement added. “It 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 the Kingdom of Saudi Arabia.”
The agreement was announced during the Future Investment Initiative (FII) Forum held in Saudi capital of Riyadi last week. The Saudi Center for International Communication (CIC) reports that Branson told forum attendees that he wants to fly suborbital space tourism flights from the kingdom.
In his FII presentation on Virgin’s space projects, Branson said a space-themed center may be built at the new Entertainment City in the Saudi capital. He gave no details but said there could be future launches from the Kingdom…
“In one of your cities .. that I look forward to be working with you on, there will be this: a space center built,” he said. “This will be in the new Entertainment City.”
He did not give a specific date, but said he would like to see it established as soon as possible….
“First of all, not just to enable people from around the rest of the world to go to space but obviously to hopefully bring spaceships and motherships to Saudi Arabia to operate them from the runway here, to educate people and do a lot of space work here; to entertain people, there is an entertainment aspect to it.”
The CIC account also said that Branson’s space companies and PIF will “cooperate to implement a roadmap, to be agreed upon, to develop the space sector in the Kingdom in accordance with existing legislation.”
The Saudi deal would require the approval of the U.S. government, as would any SpaceShipTwo flights from the Saudi capital.