ACWA Power, a international developer and operator of power generation and water desalination projects, has recently inked an agreement with Badeel, the water and electric holding company of the Saudi Arabian Public Investment Fund (PIF). The partnership aims to embark on the development of 4.5GW of solar photovoltaic (PV) projects within Saudi Arabia. This ambitious endeavor is projected to require a substantial investment of SAR12.2 billion (equivalent to US$3.3 billion).
The solar portfolio consists of three distinct projects: Ar Rass 2, Saad 2, and Al Kahfah solar plants. The anticipated capacities of these projects are approximately 2GW, 1.125GW, and 1.4GW, respectively. To ensure a reliable market for the generated power, power purchase agreements have been established with the Saudi Power Procurement Company (SPPC). Financial close for this remarkable portfolio is anticipated to take place in the third quarter of this year.
Mohammed AlBalaihed, the head of energy and utilities at PIF, expressed his enthusiasm for the venture, stating that “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 (NREP).” PIF has prioritized renewable energy as a strategic sector, aiming to unlock the potential of promising industries while enabling the private sector to contribute to Saudi Arabia's economic diversification efforts.
ACWA Power has a history of collaboration with PIF subsidiary Badeel. In November, the two entities joined forces to construct an additional 2GW PV plant in Saudi Arabia's Makkah province, which aligns with PIF's renewable energy targets under the NREP. Currently, PIF and its subsidiaries are actively developing five projects valued at 8GW, representing a significant investment of US$6 billion, as part of Saudi Arabia's ambitious plan to deploy 59.7GW of renewable energy by 2030.
PIF emphasized its commitment to supporting local economies and supply chains by imposing substantial domestic content requirements for its PV projects.
The Saudi market has witnessed notable progress by several prominent PV companies. In March 2022, US solar tracker supplier Nextracker secured a 450MW supply deal for the initial phase of an ACWA Power/PIF project. Similarly, fellow tracker company Arctech recently inked a significant 1.5GW supply agreement in Saudi Arabia, further exemplifying the strides made by key players in this burgeoning market.
