Chinese photovoltaic manufacturing enterprise GCL Technology Holdings Ltd said the company is in advanced talks with Saudi Arabia about opening its first overseas factory as China aims to extend its energy ties beyond fossil fuels.

The company, the world's second-largest manufacturer of polysilicon, a key component in solar panels, said it is looking to build a plant in the Middle Eastern nation that would produce 120,000 metric tons of green hydrogen per year.

The project will kick off as early as 2025, said the company's Joint CEO Lan Tianshi.

Saudi Arabia has mature infrastructure and experience in manufacturing, while the country's abundant sunlight could also support its transition from an oil giant to a solar energy producer, he said.

An analyst said the company's interest is in accordance with the ever-growing energy cooperation between the two countries after China's top leadership visited Riyadh in December.

Luo Zuoxian, head of intelligence and research at the Sinopec Economics and Development Research Institute, said Chinese solar companies' overseas business expansion is mutually beneficial for both China and Saudi Arabia.

While contributing to global carbon emissions reduction, Chinese solar companies' overseas expansion also widens their presence on the global stage, consolidating their position as industry leaders, he said.

While Saudi Arabia is rich in oil and gas resources, it is also stepping up efforts in green energy transition in recent years and the region's vast desert areas could facilitate its photovoltaic power generation industry, he said.

"By setting up new infrastructure in Saudi Arabia, GCL will also tap into the country's large potential market for a bigger market share, as the country is very focused on energy transition and in need of technological assistance from leading solar companies."

Luo added that declining photovoltaic prices, prompted by technological advances, are also delivering opportunities for the expansion of Chinese solar companies, who are seeking opportunities abroad due to fierce competition in the domestic market.

Lower photovoltaic prices have also boosted demand both in China and elsewhere. Asia's largest economy is set to install a record capacity this year of as much as 140 gigawatts, said the China Photovoltaic Industry Association.

Lan said the company has considered potential expansion into Mexico to serve the North American market.