Saudi petrochemical giant SABIC has established a joint venture company to build one of the world’s biggest utility-scale battery factories.

SABIC unit Nusaned Investment has teamed up with SCHMID Group to develop the vanadium redox flow batteries.

The Riwaq Industrial Development Company will also join the JV, SABIC said in a statement.

The new factory is expected to be in production in 2021.

Battery storage is attracting a wave of international investment as demand increases to store the energy being produced by new renewable projects worldwide. Investing in such renewables projects is also a cornerstone of Saudi Arabia’s energy reform plans as it weans itself off reliance on oil revenues.

“The closing marks a milestone for Saudi Arabia in its quest to localize manufacturing for technologies in emerging industries,” said Fuad Mosa, CEO of Nusaned Investment

The new company will produce energy storage systems for use alongside utility-scale renewables projects, telecom towers, mining sites, remote cities and off-grid locations, SABIC said.

Saudi Arabia is aiming to install 57.5 GW of renewable capacity by 2030, spurring demand for new battery storage capacity in the Kingdom.

The project will be developed in Dammam 3rd Industrial City and will have an annual production capacity of 3 GWh — making it among the biggest Flow Battery production facilities worldwide.

Nusaned Investment is an investment company based in Riyadh with a mandate to increase local content in the Kingdom.