Saudi Arabia Secures Financing For $2.4 Billion Solar Project

Several Saudi firms, including oil giant Aramco and a company owned by the Kingdom’s sovereign wealth fund, announced on Sunday the financial close of a major solar project in Saudi Arabia worth $2.37 billion in investment, the Saudi Press Agency reported.  

Saudi Aramco Power Company (SAPCO), a wholly-owned subsidiary of the world’s largest oil firm, Aramco, as well as Saudi Arabia’s ACWA Power and the Water and Electricity Holding Company (Badeel), wholly-owned by the Public Investment Fund (PIF), are advancing the Al Shuaibah 1 and Al Shuaibah 2 solar PV projects, which are expected to generate more than 2.6 gigawatts (GW) of clean electricity. Al Shuaibah PV 1 and Al Shuaibah PV 2 will have a capacity of 600 MW and 2,031 MW respectively, and will be capable of powering around 450,000 Saudi households.

With total investment estimated at $2.37 billion, the plant is expected to start commercial operations in 2025.

“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% of electricity from renewable sources by 2030,” Marco Arcelli, chief executive at ACWA Power, said.

Mohammed Al Qahtani, President of Downstream at Aramco, commented,

“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,” Al Qahtani added.

Saudi Arabia will spend some $270 billion (1 trillion riyals) on low-carbon energy projects by 2030, Energy Minister Prince Abdulaziz bin Salman said earlier this year, adding the Kingdom would also invest in modernizing its grid.

In wind and solar, Saudi Arabia has perhaps one of the most ambitious capacity-building targets in the world. In 2030, the Kingdom aims to have some 58 GW of wind and solar energy capacity, which would compare with less than 1 GW currently.

By Tsvetana Paraskova for Oilprice.com

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