Badeel, ACWA Power Invest in 3 Saudi Solar Projects
Badeel, a wholly-owned company of the Public Investment Fund (PIF), and ACWA Power have signed power purchase agreements (PPAs) with the Saudi Power Procurement Company (SPPC) for the development and operation of three significant new solar PV Independent Power Producer (IPP) projects in Saudi Arabia.
As part of the National Renewable Energy Programme (NREP), overseen by the Ministry of Energy, the solar projects will contribute to PIF's goal of developing 70% of NREP's target capacity.
Badeel and ACWA Power will jointly own these projects. ACWA Power, a prominent developer and operator of power generation, water desalination, and green hydrogen plants globally, is partnering with Badeel.
These projects aim to generate a total capacity of 4.55GWac of renewable energy, supplying power to around 750,000 households. Ar Rass 2, Saad 2, and Al Kahfah projects will have respective capacities of approximately 2,000MWac, 1,125MWac, and 1,425MWac of renewable power, with a combined value of SAR12.2 billion (US$3.25 billion). It is anticipated that financial close for these projects will be achieved by the third quarter of 2023.
The Ministry of Energy is committed to achieving the objectives of Saudi Arabia's Vision 2030 by leveraging renewable energy sources to replace liquid fuels and achieve an optimal energy mix for power generation. The ministry aims to increase the proportion of renewables in the energy mix to approximately 50% by 2030, while the remaining portion will be supplied by high-efficiency gas-fueled power plants.
PIF is currently involved in the development of five projects, collectively amounting to 8GW of capacity and attracting over US$6 billion in investment from PIF and its partners. These renewable projects, namely Sudair, Shuaibah 2, Ar Rass 2, Al Kahfah, and Saad 2, have a strong emphasis on facilitating and supporting the local private sector. This includes significant local content requirements and the procurement of equipment, supplies, and services through local supply chains.
According to Mohammed AlBalaihed, Head of Energy & Utilities at PIF, the three new solar projects are a testament to PIF's commitment to developing 70% of Saudi Arabia's renewable energy by 2030, aligning with the National Renewable Energy Programme. PIF prioritises renewable energy as a key sector, aiming to harness the potential of promising industries and empowering the private sector to contribute to the diversification of the Saudi Arabian economy.
The plants will utilise cutting-edge PV technology and feature innovative designs, ensuring exceptional efficiency, reliability, and performance compared to any comparable facility worldwide. The energy generated will meet the increasing demand in the country and bolster the presence of green energy in the grid, further supporting the achievement of Vision 2030's clean energy objectives.
Marco Arcelli, Chief Executive Officer at ACWA Power, expressed immense pride in leading Saudi Arabia's ambitious energy diversification plans and contributing to its Net Zero targets. The signing of three Power Purchase Agreements represents a significant milestone for ACWA Power, as it marks the largest single transaction for solar projects in the company's history. This achievement showcases ACWA Power's unwavering commitment to a sustainable future for Saudi Arabia and beyond.
Arcelli also emphasised the honour of partnering with Badeel and the Saudi Power and Procurement Company, who have entrusted ACWA Power with the delivery of sizable and complex projects. ACWA Power remains dedicated to generating long-term, sustainable value for government stakeholders, offtake partners, and communities at large. They eagerly anticipate working collaboratively to achieve ambitious goals.
With the addition of the three new projects, ACWA Power's solar portfolio in Saudi Arabia now comprises 11 projects, with a combined PV capacity exceeding 12GW. This expands ACWA Power's total renewable capacity portfolio to 23.4GW.
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Source: PIF
