ACWA receives $320m financing for 300 MW Saudi project

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Saudi energy group ACWA has secured SAR 1.2 billion SAR ($319.9 million) in financing for its 300 MW Sakaka solar PV project.

The company said the funds were provided through limited recourse ring fenced project financing, with the entire debt fully underwritten by France-based financial services provider Natixis, which is the initial mandated lead arranger and bookrunner. It added that the Arab National Bank provided an equity bridge loan for the transaction.

ACWA said the project will now be developed via a special purpose vehicle, called Sakaka Solar Energy Company (SSEC), of which it owns 70%. The remaining stake belongs to Saudi contractor AlGihaz Holding Company through its RE unit AlGihaz Renewable Energy Company.

“SSEC has concluded a 25 years Power Purchase Agreement with Saudi Power Procurement Company (SPPC) acting as off-taker,” said ACWA in a statement released.

The Saudi energy giant was awarded the contract to build the project by the Renewable Energy Project Development Office (REPDO) in February. The company won the tender despite submitting the second lowest bid of SAR 0.08872 ($0.0236) per kWh.

The lowest bid, which still remains the world’s lowest bid in a large-scale solar tender, came from French power utility EDF. The incredible offer – SAR 0.06697 ($0.0178) per kWh – which raised eyebrows at the time, was not shortlisted for the final phase.

Saudi Arabia’s first solar plant will be located near Sakaka, a city in the northwestern province of Jawf. It must be built with a 30% quota of locally manufactured PV components.

The King of Saudi Arabia is seeking to diversify the country’s economy, mainly based on oil, through the massive deployment of solar and renewable energies. The current administration is aiming to install 9.5 GW of wind and solar capacity by 2023

The REPDO is expected to launch tenders for seven large-scale solar power projects totaling 3.3 GW by the end of this year. Meanwhile, the Saudi Ministry of Energy, Industry and Mineral Resource (MEIM) has recently rejected rumors that plans for a US$200 billion, 200 GW solar project in Saudi Arabia by 2030, announced in March, have been scrapped.