ACWA Power, PIF-owned Badeel invest $3.3bn in Saudi solar projects – EQ Mag
The projects intend to produce a combined capacity of 4.55GWac, powering approximately 750,000 households
Saudi PIF-owned Badeel and ACWA Power have signed power purchase agreements (PPAs) with the Saudi Power Procurement Company (SPPC) for the development, and operation of three major new solar PV Independent Power Producer (IPP) projects in Saudi Arabia.
Advancing Saudi Arabia’s renewable energy program
These projects are part of Saudi Arabia’s National Renewable Energy Program (NREP) led by the Ministry of Energy, with PIF tasked to develop 70% of the program’s targeted capacity. The jointly owned projects, developed by Badeel and ACWA Power, aim to generate a combined capacity of 4.55GWac of renewable energy, providing power to approximately 750,000 households. The projects include Ar Rass 2, Saad 2, and Al Kahfah, with capacities of approximately 2,000MWac, 1,125MWac, and 1,425MWac, respectively, and a total value of SAR12.2 billion (US$3.25 billion). Financial close for these projects is expected by the third quarter of 2023.
Vision 2030 and the green energy transition
Saudi Arabia’s Ministry of Energy is dedicated to achieving the goals of Vision 2030 by diversifying the energy mix and reducing reliance on liquid fuels through renewable energy sources. The ministry aims to increase the share of renewables in the energy mix to around 50% by 2030, with the remaining portion supplied by high-efficiency gas-fueled power plants.
PIF’s commitment to renewable energy
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 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.
Mohammed AlBalaihed, Head of Energy & Utilities at PIF
Utilising 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 fulfilment of Vision 2030 clean energy goals.
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 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.
Marco Arcelli, Chief Executive Officer of ACWA Power
“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.”
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 23.4GW.
Source: mepmiddleeast
