• Projects mark an important milestone for the National Renewable Energy Program, which is supervised by Ministry of Energy
  • PIF is mandated to develop 70% of renewable energy target capacity in Saudi Arabia by 2030

Riyadh ‒ The Water and Electricity Holding Company (Badeel), a wholly-owned company of the Public Investment Fund (PIF), and ACWA Power today announced the signing of power purchase agreements (PPAs) with the Saudi Power Procurement Company (SPPC) for the development, and operation of three major new solar PV Independent Power Producer (IPP) projects in Saudi Arabia.

The solar projects are part of the National Renewable Energy Program (NREP) which is led and supervised by the Ministry of Energy, with PIF mandated to develop 70% of NREP’s target capacity. The new projects will be jointly owned by Badeel and ACWA Power, a leading developer, investor, and operator of power generation, water desalination and green hydrogen plants worldwide.

These projects intend to produce a combined capacity of 4.55GWac of renewable energy, powering approximately 750,000 households. The Ar Rass 2, Saad 2 and Al Kahfah projects have a capacity of approximately 2,000MWac, 1,125MWac and 1,425MWac of renewable power respectively, with a combined value of SAR12.2 billion (US$3.25 billion). Financial close for these projects is expected by the third quarter of 2023.

The Ministry of Energy aims to achieve the goals of Saudi Arabia’s Vision 2030 in reaching the optimal power generation energy mix by displacing liquid fuels through harnessing renewable energy sources. The ministry aims to increase the share of renewables in the energy mix to around 50% by 2030 with the remainder of the energy mix being supplied through high efficiency gas-fueled power plants. 

PIF is currently developing a total of five projects, with a cumulative capacity of 8GW and over US$6 billion of investment from PIF and its partners. PIF’s renewable projects - Sudair, Shuaibah 2, Ar Rass 2, Al Kahfah, Saad 2 - are aiming to enable and support the local private sector through requirements for significant local content contribution and the procurement of equipment, supplies, and services through local supply chains. 

Mohammed AlBalaihed, Head of Energy & Utilities at PIF, said: “The three new solar projects are part of PIF’s commitment to develop 70% of Saudi Arabia’s renewable energy by 2030, in line with the National Renewable Energy Program. Renewable Energy is one of PIF’s priority sectors, with a focus on unlocking the capabilities of promising sectors and enabling the private sector to enhance Saudi Arabia’s efforts in diversifying the economy.”

Utilising the most advanced PV technology, the innovative designs of the plants will aim to ensure the highest efficiency, reliability, and performance versus any comparable plant in the world. The energy output will cater to the rising demand in the country and increase the green energy resource in the grid, further enabling the fulfilment of Vision 2030 clean energy goals.

Marco Arcelli, Chief Executive Officer at ACWA Power, said: “As a Saudi national champion, we are incredibly proud to lead Saudi Arabia’s ambitious energy diversification plans and contribute towards achieving its Net Zero targets. Today's signing of three Power Purchase Agreements marks a significant milestone for ACWA Power, representing the largest single transaction for solar projects in our company's history. This achievement illustrates our firm commitment to a sustainable future for Saudi Arabia and beyond.

“It's an immense honour for us to partner with Badeel and Saudi Power and Procurement Company, who trust in our expertise to deliver projects of considerable size and complexity. Our commitment to generating long-term, sustainable value for government stakeholders, our offtake partner, and communities at large remains steadfast, and we look forward to working jointly towards achieving ambitious goals.”

ACWA Power's portfolio of solar projects in Saudi Arabia now stands at 11, with over 12GW of combined PV capacity, following the addition of the three new projects. This brings ACWA Power's total renewable capacity portfolio to 23.4GW.