Saudi sovereign wealth fund and Hyundai will spend more than $500 million to build a car factory in Saudi Arabia

Hyundai Motor Group will cooperate with Saudi Arabia Sovereign Wealth Fund (PIF) to build an automobile factory in Saudi Arabia, South Korean President Yin Xiyue said Sunday local time.

Yin Xiyue announced the above news in Riyadh, Saudi Arabia. PIF and Hyundai signed a plant agreement in Riyadh. A joint statement from both sides said the plant would have an annual capacity of 50,000 electric and gasoline-powered vehicles and would be the first South Korean auto factory in the Middle East.

PIF will own 70 percent of the new venture, with Hyundai holding the remaining 30 percent. The total investment of the project will exceed $500 million.

Hyundai, currently the world's third-largest auto group by sales, is starting to build cars in Saudi Arabia. Saudi Arabia has struggled to wean its economy off oil and aims to produce more than 300,000 cars a year by 2030.

"Hyundai will also be a strategic technology partner to support the development of the new plant by providing technical and commercial assistance," the joint statement said. "

Yin said the first cars would roll off the assembly line in 2026, but gave no details about the exact location of the factory or the specific models produced.

Yoon also signed several agreements with Saudi Crown Prince Mohammed bin Salman, including a strategic partnership and the development of "green" hydrogen energy, according to SPA, Saudi Arabia's official news agency.