Saudi Arabian utility developer ACWA Power has signed a power purchase agreement (PPA) valued at $1.75 billion with Saudi Power Procurement Co. (SPPC) for the largest solar plant in the MENA region in which the Saudi wealth fund, Public Investment Fund (PIF), will be a partner.
ACWA's project company, Shuaibah 2 Electrical Energy Co., in which PIF-owned company Water and Electricity Holding Company (Badeel) will hold a 50% stake, will develop, finance, build, own and operate the 2060 MW PV solar energy plant and the electricity produced will be sold to SPCC, ACWA Power and PIF said in separate statements on Wednesday.
The contract duration is 35 years, and the financial impact of the contracted revenues is expected to be effective after commercial operations begin by Q4 2025.
Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF, said: "This marks a key achievement toward PIF’s commitment to develop 70% of Saudi Arabia’s renewable energy by 2030. Utilities and Renewables is one of PIF’s priority sectors as part of its domestic strategy, which focuses on unlocking the capabilities of promising sectors to enhance Saudi Arabia’s efforts in diversifying revenue sources."
Shuaibah 2 is ACWA Power’s sixth solar energy facility in Saudi Arabia.
The Saudi Power Procurement Co., which was fully nationalised earlier this year with the ministries of finance and energy fully acquiring its shares, is responsible for forward planning for power requirement and generation, and for initiating power projects.
(Reporting by Brinda Darasha; editing by Seban Scaria)