ACWA Power led group reach closure for $2.37 bln fund to build Saudi solar projects

A consortium of companies led by ACWA Power announced on Sunday the successful financial close of Al Shuaibah 1 and Al Shuaibah 2 solar PV projects which will generate an aggregate capacity over 2.6GW of clean electricity for Saudi Arabia.

ACWA Power, a Saudi-listed company and a leader in the energy transition, was joined by the Water and Electricity Holding Company (Badeel), wholly owned by Public Investment Fund (PIF), and Saudi Aramco Power Company (SAPCO), a wholly owned subsidiary of Aramco, for the two projects.

The financial close for the projects is a key achievement in the National Renewable Energy Program (NREP) which is led and supervised by the Ministry of Energy and is a key achievement towards PIF’s commitment to develop 70 percent of Saudi Arabia’s Renewable Energy Target Capacity by 2030.

Saudi Power Procurement Company (SPPC) is the procurer and the off-taker for the projects, while the new projects will be jointly owned by Badeel (34.99 percent), ACWA Power (35.01 percent), and SAPCO (30 percent).

The $1.63 billion senior debt financing for this plant includes a $450 million, Saudi Riyal denominated loan from the National Development Fund on behalf of the National Infrastructure Fund (under establishment) as well as $1.18 billion, US-dollar denominated commercial facility from a consortium of local, regional, and international banks (Bank Saudi Fransi, First Abu Dhabi Bank, Mizuho Bank, Riyad Bank, Saudi National Bank, Standard Chartered Bank, and Saudi Investment Bank).

Aramco’s investment in Al Shuaibah 1 and Al Shuaibah 2 Solar PV Projects through SAPCO is its second participation in the National Renewable Energy Program, aligning with the company’s objectives of achieving net-zero of emissions by 2050.

Marco Arcelli, CEO of ACWA Power. (Supplied)
Marco Arcelli, CEO of ACWA Power. (Supplied)

PIF, through Water and Electricity Holding Company (Badeel), in partnership with ACWA Power is the lead developer is executing a total of five NREP projects, with a cumulative capacity of 8GW and over $6 billion of investment from PIF and its partners. These projects — Sudair, Al 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.

Situated in Al Shuaibah in the Makkah Province, the Al Shuaibah PV 1 and Al Shuaibah PV 2 will have a capacity of 600 MW and 2,031 MW respectively, and are capable of powering approximately 450,000 households. The total investment in the plant amounts to $2.37 billion, and commercial operations will commence in 2025.

Commenting on the financial close, Marco Arcelli, CEO of ACWA Power, said: “Securing financing for this groundbreaking project marks a significant step towards achieving Saudi Arabia’s clean energy goals, in alignment with the National Renewable Energy Program, which aims to generate 50 percent of electricity from renewable sources by 2030.”
“We are truly proud of this milestone and look forward to working closely with our key partners PIF, Aramco, and other contributors to successfully realize a sustainable future,” he added.

From his side, Husam Al-Ghailani, CEO of Badeel, said: “Reaching the financial close for Al Shuaibah 1 and Al Shuaibah 2 Solar PV Projects marks a significant milestone for Badeel,, and gives us the drive to continue our efforts to support the continuing growth of renewable energy in the Kingdom and contribute towards PIF’s commitment to develop 70 percent of Saudi Arabia’s renewable energy by 2030, which will contribute to unlocking the capabilities of promising non-oil sectors to enhance Saudi Arabia’s efforts in diversifying revenue sources and to enhance its leading role in the renewable energy sector locally and globally.”

Mohammed Al Qahtani, President of Downstream at Aramco, said: “Our participation in the Al Shuaibah PV 1 and Al Shuaibah PV 2 projects aligns with our efforts to reduce Aramco’s carbon footprint and create a more sustainable future. While oil and gas will play a major role to meet the energy demand of today and tomorrow, renewables will increasingly play a part in the energy transition to address the climate change challenges. The projects mark a significant milestone to support Aramco in achieving its decarbonization targets.”

Eng. Esmail bin Mohammad Alsallom, Chief Executive Officer of National Infrastructure Fund, commented: “NIF is proud to have played a key role in the landmark Al Shuaibah Projects, which extend NIF’s commitment to the Kingdom’s ambitious energy transition agenda. NIF has again been able to tailor its offering to enable large-scale financing from leading local and international financiers, which is central to our mandate to accelerate the delivery of critical infrastructure.”

With the addition of these two projects, ACWA Power’s solar portfolio in Saudi Arabia now exceeds 12GW of combined PV capacity. This includes the recent inclusion of three new projects with PIF subsidiary Badeel: the 2GW Ar Rass 2, 1.125GW Saad 2, and 1.4GW Al Kahfah solar plants. Overall, ACWA Power’s global portfolio of renewable energy capacity stands at 23.4GW.

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