Saudi Arabia’s sovereign wealth fund, PIF (Public Investment Fund), has made an announcement regarding the signing of power purchase agreements (PPAs) for three significant solar PV projects in the country. These agreements were signed between PIF’s utility subsidiary, Water and Electricity Holding Company (Badeel), and leading utility project developer Acwa Power.
The PPAs have been established with the Saudi Power Procurement Company (SPPC) for the development and operation of these independent power producer (IPP) projects. As part of the National Renewable Energy Program (NREP) overseen by the Ministry of Energy, PIF is mandated to develop 70% of the NREP’s target capacity. The joint ownership by Badeel and Acwa Power aims to achieve a combined renewable energy capacity of 4.55GWac, which will be capable of powering around 750,000 households.
The Ar Rass 2, Saad 2, and Al Kahfah projects, collectively valued at SR 12.2B ($3.25B), have specific capacities of 2,000MWac, 1,125MWac, and 1,425MWac for renewable power generation. PIF has announced that the financial close for these projects is anticipated to occur in the third quarter of 2023, according to TradeArabia News.
Aligned with Saudi Arabia’s Vision 2030, the Ministry of Energy aims to achieve an optimal power generation energy mix by utilizing renewable energy sources to replace liquid fuels. The ministry’s goal is to raise the renewable energy share in the overall energy mix to approximately 50% by 2030, with the remainder sourced from high-efficiency gas-powered plants.
PIF is actively developing five additional projects, with a cumulative capacity of 8GW, in collaboration with its partners, representing an investment of over $6B. These projects, including Sudair, Shuaibah 2, Ar Rass 2, Al Kahfah, and Saad 2, will facilitate the growth of the local private sector by incorporating significant contributions from local content and the procurement of equipment, supplies, and services through domestic supply chains.
PIF Head of Energy & Utilities Mohammed AlBalaihed said: “The three new solar projects are part of PIF’s commitment to develop 70% of Saudi Arabia’s renewable energy by 2030, in line with the National Renewable Energy Program.”
“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,” he noted.
The innovative solar plants will utilize cutting-edge PV technology, employing advanced designs to maximize efficiency, reliability, and performance. These state-of-the-art facilities are expected to outperform any comparable plant worldwide.
The energy generated by these projects will effectively meet the growing energy demand in Saudi Arabia and significantly contribute to the green energy resources integrated into the national grid. This will play a crucial role in achieving the clean energy objectives set forth in Vision 2030.
Acwa Power CEO Marco Arcelli said: “As a Saudi national champion, we are incredibly proud to lead Saudi Arabia’s ambitious energy diversification plans and contribute towards achieving its Net Zero targets. Today’s signing of three PPAs 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,” noted Arcelli.
“It’s an immense honour for us to partner with Badeel and Saudi Power and Procurement Company, who trust in our expertise to deliver projects of considerable size and complexity. Our commitment to generating long-term, sustainable value for government stakeholders, our offtake partner, and communities at large remains steadfast, and we look forward to working jointly towards achieving ambitious goals,” he added.
Acwa Power’s solar project portfolio in Saudi Arabia has expanded to a total of 11 projects. These projects collectively possess a combined photovoltaic (PV) capacity of over 12GW. This substantial increase elevates Acwa Power’s overall renewable energy capacity portfolio to an impressive 23.4GW.
