Saudi Arabia invests nearly $2.4 billion in two solar PV plants
Saudi Arabia has announced the approval of plans to build two solar photovoltaic (PV) facilities, in which the kingdom will invest more than $2.37 billion.
The plants, called Al Shuaibah PV 1 and Al Shuaibah PV 2, will be located in the province of Mecca and will have a generating capacity of 600 megawatts for the former and 2,031 gigawatts for the latter. This power will supply energy to more than 45,000 Saudi households.
The projects will be developed by the energy company Acwa Power; the Water and Electricity Holding Company or Badeel (owned by the Saudi Public Investment Fund); and the Saudi Aramco Power Company.
Ownership of the plants will be split between these three companies: Badeel will hold 34.99%, Acwa 35.01% and Aramco the remaining 30%. The facilities are expected to enter commercial operation in 2025.
In the words of Acwa Power CEO Marco Arcelli, “securing financing for this pioneering project is an important step towards achieving Saudi Arabia's clean energy targets, in line with the National Renewable Energy Programme, which aims to generate 50% of electricity from renewable sources by 2030”.
Arabia, carbon-free by 2060
The Arab world's largest economy is boosting the development of several renewable energy projects to increase its clean energy generation capacity and move closer to meeting the 2060 carbon neutrality target.
In addition to the Al Shuaibah PV 1 and Al Shuaibah PV 2 projects, the Saudi Public Investment Fund is implementing, through its subsidiary Badeel and with the collaboration of the company Acwa Power, five other renewable energy projects, with a cumulative capacity of 8 gigawatts and a planned investment of more than 6 billion dollars.
These projects (Sudair, Al Shuaibah 2, Ar Rass 2, Al Kahfah and Saad 2) will be specifically linked to the local private sector and will be committed to procuring equipment, supplies and services through local supply chains.
As Mohammed Al Qahtani, Aramco's president of downstream, noted, “While oil and gas will play a key role in meeting current and future energy demand, renewables will play an increasingly important role in the energy transition to meet the challenges of climate change. The projects mark an important milestone to support Aramco in achieving its decarbonisation goals”.
Funding
To finance the projects, the Saudi National Development Fund has provided a $450 million loan in Saudi rials, and a $1.18 billion financing facility, through a consortium of local, regional and international banks.
The banks in the consortium include Bank Saudi Fransi, First Abu Dhabi Bank, Mizuho Bank, Riyad Bank, Saudi National Bank, Standard Chartered Bank and Saudi Investment Bank.
The International Energy Agency forecasts that global investment in renewable energy will need to double to over $4 trillion by the end of the current decade in order to meet net zero emissions targets by 2050.