Badeel, ACWA Power To Invest Over $3 billion For 4.5 GW Solar Projects In Saudi Arabia

Providing thrust to the new wave of solar power development in Saudi Arabia, the Water and Electricity Holding Company (Badeel) and ACWA Power have signed Power Purchase Agreements (PPAs) with the Saudi Power Procurement Company (SPPC) for the development and operation of three major new solar IPP projects. Badeel is fully owned by the Public Investment Fund (PIF) of Saudi Arabia.

The solar power projects are part of the kingdom’s National Renewable Energy Program (NREP), and PIF is mandated to develop 70% of NREP’s target capacity. Badeel and ACWA Power will jointly own the new projects.

ACWA Power said the three solar power projects intend to produce a combined capacity of 4.55-GW of renewable energy, powering about 7,50,000 households. These three projects are the Ar Rass 2, Saad 2 and Al Kahfah projects, having a capacity of about 2,000 MW, 1,125 MW and 1,425MW, respectively.

The three solar projects will attract an investment of SAR12.2 billion ($3.25 billion). Financial close for these projects is expected by the third quarter of 2023, said ACWA Power.

The Ministry of Energy aims to increase the share of renewables in the energy mix of Saudi Arabia to around 50% by 2030.

Mohammed AlBalaihed, Head of Energy & Utilities at PIF, said, “The three new solar projects are part of PIF’s commitment to developing 70% of Saudi Arabia’s renewable energy by 2030, in line with the National Renewable Energy Program.”

Marco Arcelli, Chief Executive Officer of ACWA Power, stated, “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.”

The Players & Their Role In the Saudi Market

PIF is developing five projects with a cumulative capacity of 8GW and over $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.

ACWA Power maintains a strong portfolio of solar projects in Saudi Arabia that currently stands at 11 with over 12GW of combined PV capacity. It is after the addition of the three new solar projects. The total renewable portfolio of the firm stands at 23.4 GW.