Around a dozen companies are set to launch a renewable energy initiative on Monday that its backers claim could within a decade provide Europeans with electricity generated from the Sahara – at a cost of €400bn ($557bn).

Munich Re, the German insurer, Deutsche Bank, utilities RWE and Eon and industrial conglomerate Siemens are among the bluechip names that will form a company to explore the technical and geopolitical challenges of peppering the deserts of North Africa and the Middle East with solar mirrors.