Two Saudi solar projects secure $2.4bn funding

A consortium led by Acwa Power has secured financial funding worth $2.37 billion for two solar projects, as Saudi Arabia looks to ramp up its renewable energy sector by the end of the decade.

The Al Shuaibah 1 and Al Shuaibah 2 solar photovoltaic projects are expected to generate over 2.6 GW of clean electricity for the kingdom.

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The new projects are jointly owned by the Water and Electricity Holding Company (Badeel), wholly owned by the Public Investment Fund (34.99 percent), Acwa Power (35.01 percent), and Saudi Aramco Power Company, a wholly owned subsidiary of Aramco (30 percent).

The $1.63 billion senior debt financing includes a $450 million Saudi riyal-denominated loan from the National Development Fund and a $1.18 billion US dollar-denominated commercial facility from a consortium of local, regional and international banks.

The lenders include Banque Saudi Fransi, First Abu Dhabi Bank, Mizuho Bank, Riyad Bank, Saudi National Bank, Standard Chartered Bank and Saudi Investment Bank.

Situated in the Makkah province, the Al Shuaibah PV 1 and Al Shuaibah PV 2 will have a capacity of 600 MW and 2,031 MW, respectively, powering 450,000 households. Commercial operations are slated to commence in 2025.

Marco Arcelli, CEO of Acwa Power, said: “Securing financing for this project marks a significant step towards achieving Saudi Arabia’s clean energy goals, in alignment with the national renewable energy program, which aims to generate 50 percent of electricity from renewable sources by 2030.” 

In 2021 just 0.2 percent of the kingdom’s electricity came from renewable sources.

PIF, Saudi Arabia’s sovereign wealth fund, holds a 44 percent stake in Acwa Power, and has struck a deal with the company to deliver 70 percent of the country’s renewable electricity by 2030.

Acwa Power will need to deliver between 40 and 80 GW of energy, enough to power 30 million to 60 million homes a year.

Acwa Power’s solar portfolio in Saudi Arabia now exceeds 12 GW of combined PV capacity. Overall, its global portfolio of renewable energy capacity stands at 23.4 GW.