Saudi Arabia’s Public Investment Fund, ACWA Power invest $3.25 billion in three new solar projects

ACWA Power


The Water and Electricity Holding Company (Badeel), a wholly-owned subsidiary of Saudi Arabia's Public Investment Fund (PIF), and ACWA Power have signed power purchase agreements with the Saudi Power Procurement Company (SPPC) for the development and operation of three major new solar PV independent power producer projects in Saudi Arabia that will have a combined capacity of 4.55 GWac.

The solar projects are part of the Ministry of Energy's National Renewable Energy Program (NREP), in which PIF is mandated to develop 70% of the initiative's target capacity. Badeel and ACWA Power, a leading developer, investor and operator of power generation, water desalination and green hydrogen plants, will jointly own the new projects, which have a combined value of SAR 12.2 billion ($3.25 billion).

Financial close for these projects is expected by the third quarter of 2023.

The Ar Rass 2, Saad 2 and Al Kahfah projects have respective capacity levels of approximately 2,000 MWac, 1,125 MWac and 1,425 MWac and will be used to power some 750,000 households.

The companies expect the financial close for the projects by the third quarter of 2023.

The energy ministry aims to increase the share of renewables in the energy mix to around 50% by 2030, with the remainder supplied through high-efficiency, gas-fueled power plants.

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PIF is currently developing a total of five projects with a cumulative capacity of 8 GW and more than $6 billion of investment from its own funding as well as from partners. The company said it aims 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.

“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,” said Mohammed AlBalaihed, head of Energy & Utilities at PIF. “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.”

ACWA Power CEO Marco Arcelli added: “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.”

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

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