UPDATE 1-SoftBank Vision Fund, Saudi Arabia to create world's biggest solar power firm

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* Company will produce 200 GW of solar power by 2030

* Final investment will reach $200 bln - Softbank's Son

* Initial investment will be $5 bln, $1 bln from Vision Fund (Adds details from announcement)

NEW YORK, March 27 (Reuters) - SoftBank Group Corp's Vision Fund will invest in a solar power generation company in Saudi Arabia, creating the world's biggest solar producer, as it steps up its involvement in the kingdom, its chief executive said on Tuesday.

The project is expected to have the capacity to produce up to 200 gigawatts (GW) by 2030, Softbank's CEO Masayoshi Son told reporters in New York. That would add to around 400 GW of globally installed power capacity and is comparable to the world's total nuclear power capacity of around 390 GW as of the end of 2016.

The initial phase of the project for 7.2 GW of solar capacity will cost $5 billion, with $1 billion coming from Softbank's Vision Fund and the rest from project financing, Son said.

The final investment total for the 200 GW of generation, including the solar panels, battery storage and a manufacturing facility for panels in Saudi Arabia, will eventually total around $200 billion, he said.

Last May, SoftBank announced it raised over $93 billion for the Vision Fund, the world's largest private equity fund with backers including Saudi Arabia's sovereign wealth fund, Apple and Foxconn, formally known as Hon Hai Precision Industry .

In October, SoftBank Group Corp said it will work with Saudi Arabia on the development of "Neom", a new business and industrial city in the country.

Son is pursuing his vision of a future powered by interconnected devices and artificial intelligence. He established the Vision Fund, which, in conjunction with the Delta Fund set up to invest in Chinese ride-sharing firm Didi Chuxing, has funnelled $27.5 billion into 20 tech firms as of the end of December.

Despite being one of the world's sunniest countries, Saudi Arabia does not generate much power from solar, which makes up just a marginal amount of its largely oil-fired power production.

(Reporting by David French in NEW YORK; additional reporting by Henning Gloystein in SINGAPORE; Writing by Ritsuko Ando; Editing by Christian Schmollinger)