Saudi Arabia to invest $1 billion in Virgin’s space launch enterprises

Space News reports that the Virgin Group and the Public Investment Fund of Saudi Arabia have reached an agreement for an investment of $1 billion into Virgin’s Space Launch enterprises. The deal includes an option to add another $480 million in financing. The agreement represents a financial shot in the arm for the space launch company that has been struggling to get off the ground for the past 13 years, ever since the winning of the Ansari X-Prize,

What does Virgin get out of the deal?

Virgin Galactic, a space tourism company, and Virgin Orbit, a small satellite launch firm, gets a much-needed infusion of cash in advance of what it is hoped to be the start of commercial operations next year.

Virgin Galactic has been developed a spacecraft called SpaceShipTwo designed to take paying customers on suborbital jaunts for the past 13 years. The development phase has been stymied by technical challenges, including a fatal accident that occurred in October 2014. The start of commercial operations has been delayed repeatedly as a result.

A redesigned SpaceShipTwo has been undergoing tests and is expected to attempt a suborbital launch before the end of 2017. Virgin Orbit, a company that will launch small satellites into low Earth orbit, was spun off in March 2017.

Sir Richard Branson’s latest prediction for the beginning of commercial operations is within “six months.”

What does Saudi Arabia achieve?

The deal with the Virgin Group is part of Crown Prince Bin Salman’s strategy to transform the Kingdom of Saudi Arabia from an oil-based country to one that invests in High Tech. The Virgin Group already has an investment from the United Arab Emirates, a country that is pursuing a similar strategy.

Saudi Arabia would like to see a “space-centric entertainment industry” develop inside the Kingdom, suggesting that Virgin Galactic’s spacecraft may operate from a field inside the country. Such a development would make the oil-rich state a tourist destination, a remarkable achievement considering its conservative, religious culture.

Prince Bin Salman’s expressed desire is for Saudi Arabia to “return” to a form of “moderate Islam.” Such a development would contrast with the current regime that oppresses woman and religious minorities, but would indeed be a prerequisite for any tourism industry that involves people traveling to Saudi Arabia to fly into space.

When Branson announced the deal on his Twitter feed, many commenters mentioned Saudi Arabia’s poor record on human rights, implying that he should deal with a country that oppresses women and others. On the other hand, perhaps the deal could be a catalyst for improving that situation.