Saudi Arabia's sovereign wealth fund PIF (Public Investment Fund) has announced that its utility subsidiary - Water and Electricity Holding Company (Badeel), along with leading utility project developer Acwa Power have signed power purchase agreements (PPAs) for three major solar PV projects in the kingdom.
These PPAs have been signed with the Saudi Power Procurement Company (SPPC) for the development, and operation of three major solar PV Independent Power Producer (IPP) projects in Saudi Arabia.
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% of NREP’s target capacity.
The new projects, which will be jointly owned by Badeel and Acwa Power, aim 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 2,000MWac, 1,125MWac and 1,425MWac of renewable power respectively, with a combined value of SR12.2 billion ($3.25 billion).
According to PIF, the financial close for these projects is expected by the third quarter of 2023.
The 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% by 2030 with the remainder of the energy mix being supplied through high efficiency gas-fueled power plants.
PIF said it is currently developing five new projects, at an investment of over $6 billion in co-ordination with its partners. that will boast a cumulative capacity of 8GW.
PIF’s renewable projects - Sudair, Shuaibah 2, Ar Rass 2, Al Kahfah, Saad 2 - will help support the local private sector through requirements for significant local content contribution and the procurement of equipment, supplies, and services through local 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.
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, he added.
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 said its 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 its total renewable capacity portfolio to 23.4GW.-TradeArabia News Service