Saudi energy group ACWA has secured SAR 1.2 billion ($319.9 million) in financing for its 300 MW Sakaka solar PV project.
The company said the funds were provided through limited recourse ringfenced project financing, with the entire debt fully underwritten by French financial services provider Natixis, which is the initial mandated lead arranger. It added that the Arab National Bank provided an equity bridge loan for the transaction.
ACWA said the project will now be developed via special purpose vehicle Sakaka Solar Energy Company, of which it owns 70%. The remaining stake belongs to Saudi contractor AlGihaz Holding Company, through its renewables unit AlGihaz Renewable Energy Company.
“SSEC has concluded a 25-year power purchase agreement with Saudi Power Procurement Company acting as off-taker,” said ACWA in a statement.
The Saudi energy giant was awarded the contract to build the project by the Renewable Energy Project Development Office in February. The company won the tender despite submitting only the second lowest bid, of SAR0.08872/kWh ($0.0236).
The lowest bid – the world’s lowest in a large scale solar tender – came from French utility EDF. That incredible offer, of SAR0.06697/kWh ($0.0178), 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 oil-dependent economy through massive deployment of solar and other renewable energies. The administration is aiming to install 9.5 GW of wind and solar capacity by 2023.
REPDO is expected to launch tenders for seven large scale solar power projects with 3.3 GW of generation capacity by the end of the year. Meanwhile, the Saudi Ministry of Energy, Industry and Mineral Resource recently scotched rumors it had scrapped plans for a $200 billion, 200 GW solar project in the kingdom by 2030.