A consortium that is developing Saudi Arabia’s largest solar project has reached financial close for the plant and has secured the backing of state oil producer Saudi Aramco.
The Saudi Aramco Power Company (SAPCO), a unit of Aramco, has joined the consortium behind the 1.5GW Sudair plant that is led by developer ACWA Power and also includes the Water & Electricity Holding Company (Badeel), a company owned by the country’s Public Investment Fund (PIF).
ACWA and Badeel will each own 35% in the special purpose vehicle Sudair One Renewable Energy Company, which was incorporated for the project, with SAPCO holding a 30% stake.
With an investment value of SAR 3.4 billion (US$906 million), the Sudair project will be constructed in Sudair Industrial City and feature bifacial PV modules and trackers.
An engineering, procurement and construction (EPC) agreement for the plant was signed with Larsen & Toubro in April, with the first phase of the project expected to begin producing electricity during the second half of 2022.
A 25-year power purchase agreement (PPA) for the plant has been signed with the Saudi Power Procurement Company.
Financing for the project is being provided by Mizuho Bank, Riyad Bank, Korea Development Bank, Arab Petroleum Investments Corporation, Al Rajhi Banking & Investment Corporation, Standard Chartered, Bank Al Bilad, Saudi British Bank and SMBC International.
The launch of the Sudair plant was announced at the inauguration of the Sakaka PV project, which was also developed by ACWA, in April 2021.
Elsewhere, ACWA last year signed a power purchase agreement for the fifth phase of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai and recently secured funding for the construction of a 200MW PV plant in Egypt.
ACWA chairman Mohammad Abunayyan said the Sudair development will see the company transfer its experience and knowledge in the global renewables sector back to Saudi Arabia.
“The project will encourage Saudi companies to participate in the implementation of renewable energy projects and support local talent in cultivating the skills and competencies needed in this thriving sector, which constitutes one of the kingdom’s key pillars for sustainable socioeconomic development,” he said.
The plant is the first project under PIF’s renewable energy programme, which aims to support Saudi Arabia’s energy transition and to deliver 70% of the country’s renewable energy.
Other recent developments in Saudi Arabia’s PV sector have seen a consortium between Masdar, EDF Renewables and Nesma Holding Company break ground on a 300MW PV project, while Total has formed a joint venture with industrial conglomerate Zahid Group focused on distributed solar.