Japanese conglomerate SoftBank Group Corp. signed a nonbinding agreement with the Public Investment Fund of Saudi Arabia to develop a $200 billion, 200,000-MW solar power project in Saudi Arabia, according to several news reports.

The project is expected to generate 200,000 MW of electricity by 2030. During a March 27 news conference in New York, SoftBank Group Chairman and CEO Masayoshi Son reportedly described the project as "the world's biggest solar power generation." He was joined at the event by Saudi Crown Prince Mohammed bin Salman, who is touring the U.S. and lining up investors as part of an effort to diversify Saudi Arabia's economy.

The deal represents the first major investment by the SoftBank Vision Fund in Saudi Arabia, according to The Associated Press. Son the prince agreed to complete due diligence on the project by the end of May.

The solar installations will be built at various locations throughout Saudi Arabia.

The construction of the first phase of the project, consisting of two solar installations, will start in 2018 at a cost of roughly $5 billion, with Softbank contributing $1 billion while the remaining $4 billion will come from project financing. The parties expect to bring the first two solar farms online in 2019, and they are expected to generate around 7,200 MW. Each of these solar farms will have a 25-year power purchase agreement.

Initially, solar panels will be imported but the new venture will later include a panel manufacturing and assembly site, according to Son.

The new venture also plans to add battery storage systems to solar farms within two to three years, according to reports.

The project is estimated to help save Saudi Arabia $40 billion by reducing its reliance on oil to generate electricity. The venture with SoftBank is part of Prince Mohammed's "Vision 2030" plan for Saudi Arabia to reduce its economy's dependency on its crude-oil reserves.