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Abu Dhabi, UAESunday 24 June 2018

Saudi Arabia’s PIF agrees to invest $1bn in Virgin Galactic spaceship company

The agreement includes option for $480m in additional investments

Richard Branson, with Saudi Crown Prince Mohammed bin Salman, said that Virgin Galactic would send its first aircraft into space within three months, with Virgin Orbit launching satellites within four months. Courtesy: Saudi Press Agency
Richard Branson, with Saudi Crown Prince Mohammed bin Salman, said that Virgin Galactic would send its first aircraft into space within three months, with Virgin Orbit launching satellites within four months. Courtesy: Saudi Press Agency

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, will invest around US$1 billion in British billionaire businessman Richard Branson’s space travel ventures, the fund announced at the close of the Future Investment Initative summit in Riyadh.

The agreement to invest in Virgin Galactic, The Spaceship Company, and Virgin Orbit, includes an option for an additional $480 million investment, and the development of a space-centric entertainment facility in Saudi Arabia, with Mr Branson also agreeing to join the board of kingdom's Red Sea Project tourism venture.

Virgin Galactic, founded in 2004 with the initial goal of offering suborbital space flight, is backed by Abu Dhabi’s Aabar Investments, which has a 37.8 per cent stake in the space venture.

The agreement with Virgin is the latest in a series of deals struck by PIF during the three day summit that are in line with the kingdom’s Vision 2030, which aims to lower the country’s dependency on oil by creating new revenue streams.

“This partnership with Virgin Group reflects the great strides the kingdom is making towards our vision for a diversified, knowledge-based economy,” said Crown Prince Mohammad bin Salman, who is also chairman of PIF. “The future of Saudi Arabia is one of innovation, as showcased at this week’s Future Investment Initiative, and 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.”

Mr Branson told delegates at the Riyadh summit that Virgin Galactic would take its first aircraft into space within three months, with Virgin Orbit launching satellites within four months.

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"The exciting thing is that we have done a lot of research and most people in the world would love to go to space," he said. "They like us to offer them a return ticket so [we] have to make sure it's very safe and they would be able to afford it."

"Virgin Orbit will be putting satellites in the space in about four months time, travelling about 18,500 miles an hour. That will be the start of this whole revolution of small satellites orbiting around the world, connecting people," he said.

Virgin Galatic competes with other spaceship ventures, including Jeff Bezos' Blue Origin, Mark Zuckerberg’s Breakthrough Starshot and Elon Musk’s Spacex.

Meanwhile, Mr Branson also said that he had agreed to join the board of the Red Sea Project, the kingdom’s ambitious tourism project that will transform a 200-kilometre stretch of Red Sea coastline into a luxury destination, after he announced he would invest in the project earlier this month.

“It's an exciting time to be here, it's an exciting time to invest in Saudi Arabia,” he told delegates.

PIF is spearheading investment into the Red Sea project, which will link more than 50 islands, create 35,000 jobs and add 15 billion Saudi riyals to the kingdom’s economy.

While the PIF will fund the initial stages of the project, the plan is to later partner with leading international companies.

Mr Branson was persuaded to invest in the country’s tourism sector after making a trip to Saudi Arabia, where he visited the Red Sea and also the tombs at Mada’in Saleh, a Unesco World Heritage site.

“I went to the Red Sea and stood on these beautiful islands that you have. I have been to the Maldives and I live on the Virgin Islands and they [the Red sea islands) are as good if not more beautiful. [They’re] an absolute gem in Saudi Arabia right on your doorstep.”

“And then you have these incredible mountains.There are spectacular places inland," he continued.

"I have ballooned over Wadi Rum and I’ve been to Petra and you have your very own Wadi Rum and Petra here.”

Under the 2020 National Transformation Programme, the government envisages total new tourism investments will reach 171.5 billion riyals from a baseline of 145bn riyals.

The 2020 plan also aims to boost the contribution of the tourism sector to GDP to 3.1 per cent from the current 2.9 per cent.