Saudi Arabia's Public Investment Fund on Thursday announced a $1 billion investment in  British billionaire Richard Branson's space tourism company Virgin Galactic.

The announcement on the sidelines of an investment summit in Riyadh comes nearly a month after the Virgin Group founder said he would invest in the kingdom's Red Sea project that aims to turn 50 Saudi islands into luxury tourism destinations.

"This investment will enable us to develop the next generation of satellite launches and accelerate our programme for point to point supersonic space travel," Branson said.

The billionaire added that Virgin Galactic was just "months away" from going into space with people on board and his other company Virgin Orbit placing satellites around the Earth.

Branson last year unveiled a new commercial spaceship in a ceremony in California, with his company stressing that commercial space flights would not be available until they could be done safely.

The company's efforts faced a major setback when the first version of the SpaceShipTwo disintegrated over California's Mojave Desert in October 2014, with investigators blaming premature brake deployment during the test flight.

Saudi Arabia's investment appears to be part of a collaboration with Branson, who praised the kingdom's economic and social reforms spearheaded by Crown Prince Mohammed bin Salman.

"I am so excited about Saudi Arabia," Branson told the Future Investment Initiative in Riyadh.

"Last time I looked at audience I could only see men. Now I look out and see men and women siting together."

The 32-year-old Saudi crown prince is behind wide-ranging social and economic reforms, including a decree that would allow women to drive from next June, while sidelining powerful clergy who have long dominated the public discourse.