Saudi Arabia will be counting on partnerships with Chinese companies to help the Gulf country build up a renewable energy industry of its own, according to an executive at its sovereign wealth fund.

“We have huge demands for renewables and it makes a lot of sense for us from an economic development perspective and from a security of supply perspective to localize these products in the KSA (Kingdom of Saudi Arabia),” said Mohammed Albalaihed, head of energy and utilities at the Public Investment Fund (PIF), at an industry event.

“I’m talking about PV (photovoltaic) panels; I’m talking about wind turbines; I’m talking about electrolyzers and batteries, and in all honesty, we don’t see better partners in that field than the Chinese companies,” Albalaihed told Caixin in an Oct. 24 interview during the 7th edition of the Future Investment Initiative (FII) held in Riyadh. “Why? They are the most successful, the biggest, and they are able to produce at the most competitive cost, which is super important for us.”

The executive hopes that such partnerships can facilitate the transfer of knowledge as well as research and development from China to Saudi Arabia, which will drive domestic manufacturing and eventually push down costs.

The acceleration comes as the Middle Eastern country seeks to extend its energy sources beyond oil and diversify its economy under “Vision 2030” — a plan for promoting private business, encouraging foreign investment and driving social change. The PIF, which has more than $700 billion in assets under management, is committed to developing 70% of Saudi Arabia’s renewable energy capacity target of 58.5 gigawatts by 2030.

At the same time, Saudi Arabia is an ideal destination for Chinese companies looking to expand outside of their home country, according to Albalaihed. “We’ve noticed from our Chinese counterparties today, most of these industries are actively trying to build hubs outside of China to not only supply a country, but also building a hub to supply the region and the globe. And we think Saudi is very well positioned to be the partner of choice there,” he said, because the kingdom is also ramping up investments in large energy projects to serve the country and become a key export hub for the region.

The sovereign wealth giant is currently in advanced talks to officially launch joint partnerships in large solar and wind projects, including with Chinese solar giant Longi Green Energy Technology Co. Ltd. (601012.SH +2.54%), according to the executive. Hopefully, these big projects will help Saudi Arabia become one of the few countries outside of China that has the full solar value chain that stretches from manufacturing polysilicon to modules, Albalaihed said.

Solar supplier GCL Technology Holdings Ltd. is also looking to build its first overseas plant in Saudi Arabia that would produce 120,000 tons a year, Joint Chief Executive Officer Lan Tianshi said in a Bloomberg interview in September. The plant could be up and running as early as 2025, he said.

The PIF is also hoping to explore opportunities to cooperate in developing hydrogen, as well as batteries for utility-scale storage systems and electric vehicles — areas where Chinese companies are also in advanced stages of development, he said.

Apart from increased energy cooperation, China has also been tightening its business and political connections with the Gulf country. In March, Beijing brokered an agreement for Saudi Arabia and Iran to reestablish diplomatic ties, while in December President Xi Jinping visited Riyadh for the China-Gulf Cooperation Council Summit and the first China-Arab States Summit. During the BRICS forum in August, China also invited Saudi Arabia and other top oil exporters to join the bloc.