• Major investor ACWA Power operates in the Middle East, Asia, and Africa.
• Solar and wind projects will be built in Riyadh, Mecca, Medina, and Aseer.
• The Kingdom aims to source 50% of its electricity from renewable sources by 2030.

The oil-run Saudi Arabian economy is now turning to expanding its renewable energy generation capacity, with a plan to invest $8.3 billion to reach its goal of generating 50 per cent of electricity from renewable energy sources by 2030.

The proceeds will go to the development of five solar power plants and two wind farms in the Kingdom. This endeavour is part of the desert country's plan to downsize its dependence on oil and gas.

The project is supported by a consortium led by ACWA Power, a company partly owned by Saudi Arabia’s sovereign wealth fund, which operates in the Middle East, Africa, and Asia. Another top investor in the project is Aramco Power, owned by oil giant Saudi Aramco. They have inked a deal with the state-owned electricity buyer for the supply of the energy they will generate.

Read More: Hysata and ACWA Partner to Expand Green Hydrogen in Saudi Arabia

For the present, a lion's share of the Kingdom's electricity comes from oil- and gas-fired power plants; however, the sovereign Arab Islamic state has sustainable ambitions to increase its renewable market competitiveness.

With around 4.34 gigawatts (GW) of solar capacity at the end of 2024, the nation is moving towards reaching 130 GW of solar and wind energy by 2030. By the way, approximately 1 GW can power about 1 million homes.

The government describes the agreement as "among the world's biggest", which could provide power at some of the lowest prices globally. It attributes the success to efficient financing models and growing investor morale in Saudi Arabia's energy market.

While two solar and two wind projects will come up in the Riyadh region, additional solar farms will be built in Mecca, Medina, and Aseer Province. The plants are expected to start operations by 2028.

Also Read: Morgan Stanley Invests in Torch to Expand Integrated Renewable Power Solutions

Marco Arcelli, Chief Executive Officer of ACWA Power, said: "This landmark agreement represents an important milestone in Saudi Arabia's strategic vision for a more resilient and more sustainable energy landscape, underlining the nation’s commitment to achieving its ambitious renewable energy targets.

"As the largest and most comprehensive agreement to date under the National Renewable Energy Programme (NREP), it reflects our dedication to collaborate with the Saudi Power Procurement Company (SPPC), PIF and Aramco as we collectively advance this step shift towards a more sustainable energy future."

Ends/

Want to boost sustainability across your business operations? Discover our ESG Marketplace, home to over 750 providers delivering a range of ESG and sustainability services.

Stay informed with the latest insights by following KnowESG’s Sustainable Finance News.

Explore our recent ESG Event updates.