Saudi Arabia's Public Investment Fund (PIF) announced on Wednesday the launch of the largest solar power plant in the Middle East and North Africa at Al-Shuaibah in Makkah region as part of its renewable energy program.
The Saudi Press Agency (SPA) reported that a PIF-backed consortium comprising ACWA Power and the Water and Electricity Holding Company (Badeel), a wholly-owned PIF subsidiary, has signed a 35-year power purchase agreement (PPA) with the Saudi Power Procurement Company (SPPC), the off-taker for the 2.06 gigawatts (GW) solar power plant. The project, with an investment value of $1.75 billion, is expected to start commercial operation by the fourth quarter of 2025.
The project will be jointly owned by Badeel and ACWA Power, a leading investor and operator of power generation, water desalination and green hydrogen plants worldwide. Each company will hold a 50% equity stake through Shuaibah Two Electrical Energy Company, a joint venture dedicated to develop the project.
In April 2021, the same consortium inked a PPA with SPPC for the 1,500MW Sudair solar photovoltaic (PV) plant in Sudair Industrial City in Riyadh province with an investment value of approximately SR3.4 billion Saudi ($905 million). The Sudair plant’s initial commissioning was expected during the second half of 2022.
The two projects form part of PIF’s commitment to develop 70 percent of Saudi Arabia’s renewable energy capacity outlined in the Kingdom’s Vision 2030. The solar power plant is a concrete representation of the energy transition in play — a giga scale development in sustainable energy that will play a key role in translating Saudi Vision 2030 goals, SPA said.
Deputy governor and head of MENA Investments at PIF Yazeed A. Al-Humied said, “This marks a key achievement for PIF’s commitment to develop 70% of Saudi Arabia’s renewable energy by 2030. Utilities and Renewables is one of PIF’s priority sectors as part of its domestic strategy, which focuses on unlocking the capabilities of promising sectors to enhance Saudi Arabia’s efforts in diversifying revenue sources”. Chairman of ACWA Power Mohammad Abunayyan said: “Under the guidance of our visionary leadership and the Ministry of Energy, Saudi Arabia continues to accelerate its ambitious plans for diversifying its energy mix to include renewable energy. It is a great honor to partner with Badeel and SPPC in developing this milestone project which will set a benchmark for sustainable energy development in the region.”
He added: “Solar power is a key component in unlocking positive economic, environmental and social outcomes for the betterment of communities across our great nation. We remain committed to developing local capabilities in technology, supply chain, and talent and ensure they are realized to their fullest potential.” Badeel and ACWA Power will build, own, and operate Al Shuaibah Two facility and the electricity produced will be sold to SPPC. When completed, the project will power 350,000 homes.
Shuaibah Two is ACWA Power’s sixth solar energy project in Saudi Arabia. In addition, ACWA Power’s KSA portfolio comprises 13 power, water desalination and green hydrogen plants.
