Riyadh, Saudi Arabia ‒ The Public Investment Fund (PIF) owned Water and Electricity Holding Company (Badeel) and ACWA Power are investing $3 billion into three new solar projects in Saudi Arabia.
To this end, the companies announced the signing of power purchase agreements (PPAs) with the Saudi Power Procurement Company (SPPC).
The solar projects are part of the National Renewable Energy Program (NREP) which is led and supervised by the Ministry of Energy, with PIF mandated to develop 70 percent of NREP’s target capacity. The new projects will be jointly owned by Badeel and ACWA Power, a leading developer, investor, and operator of power generation, water desalination and green hydrogen plants worldwide.
These projects intend to produce a combined capacity of 4.55GWac of renewable energy, powering approximately 750,000 households. The Ar Rass 2, Saad 2 and Al Kahfah projects have a capacity of approximately 2,000MWac, 1,125MWac and 1,425MWac of renewable power respectively, with a combined value of SAR12.2 billion (US$3.25 billion). Financial close for these projects is expected by the third quarter of 2023.
The Saudi Ministry of Energy aims to achieve the goals of Saudi Arabia’s Vision 2030 in reaching the optimal power generation energy mix by displacing liquid fuels through harnessing renewable energy sources. The ministry aims to increase the share of renewables in the energy mix to around 50 percent by 2030 with the remainder of the energy mix being supplied through high-efficiency gas-fueled power plants.
PIF is currently developing a total of five projects, with a cumulative capacity of 8GW and over US$6 billion of investment from PIF and its partners. PIF’s renewable projects – Sudair, Shuaibah 2, Ar Rass 2, Al Kahfah, Saad 2 – are aiming to enable and support the local private sector through requirements for significant local content contribution and the procurement of equipment, supplies, and services through local supply chains
“The three new solar projects are part of PIF’s commitment to developing 70 percent of Saudi Arabia’s renewable energy by 2030, in line with the National Renewable Energy Program,” Mohammed AlBalaihed, Head of Energy & Utilities at PIF, said. “Renewable Energy is one of PIF’s priority sectors, with a focus on unlocking the capabilities of promising sectors and enabling the private sector to enhance Saudi Arabia’s efforts in diversifying the economy.”
Utilizing the most advanced PV technology, the innovative designs of the plants will aim to ensure the highest efficiency, reliability, and performance versus any comparable plant in the world. The energy output will cater to the rising demand in the country and increase the green energy resource in the grid, further enabling the fulfillment of Vision 2030 clean energy goals.
Marco Arcelli, Chief Executive Officer at ACWA Power, said the signing of three Power Purchase Agreements marks a significant milestone for ACWA Power, representing the largest single transaction for solar projects in our company’s history.
“This achievement illustrates our firm commitment to a sustainable future for Saudi Arabia and beyond,” Arcelli said.
ACWA Power’s portfolio of solar projects in Saudi Arabia now stands at 11, with over 12GW of combined PV capacity, following the addition of the three new projects. This brings ACWA Power’s total renewable capacity portfolio to 23.4 GW.