Major milestone in KSA renewables programme as 5,500 MW power purchase agreements signed

In the presence of His Royal Highness, Prince AbdulAziz bin Salman bin AbdulAziz Al Saud, Minister of Energy, ACWA Power, a Saudi-listed company and a leader in energy transition, the Water and Electricity Holding Company (Badeel), a wholly owned company of the Public Investment Fund (PIF), and Saudi Aramco Power Company (SAPCO), a wholly owned subsidiary of Aramco, today announced the signing of power purchase agreements (PPAs) with the Saudi Power Procurement Company (SPPC) for the development and operation of three major new solar photovoltaic (PV) projects in Saudi Arabia.

With individual capacities of 2,000 MW, 2,000 MW and 1,500 MW of renewable power respectively, the Haden and Muwayh plants, in the Makkah region, and Al Khushaybi plant in the Qassim region, will be jointly owned by Badeel, ACWA Power and SAPCO. These projects represent a major milestone for ACWA Power's commitment to the Kingdom’s National Renewable Energy Plan, of which 70% of the generation capacity has been allocated under the umbrella of the Public Investment Fund.

Badeel, ACWA Power, and SAPCO are currently developing several projects with a total capacity of 13,600 MW, involving over US$9 billion of investment from PIF and its partners. These joint projects include: Sudair, Shuaibah 2, Ar Rass 2, Al Kahfah, and Saad 2, and are intended to enable and support the local private sector through significant local content requirements and procurement of equipment, supplies and services through local supply chains. 

The new solar PV facilities, with a combined value of SAR12.3 billion (USD3.3 billion), are expected to contribute an additional 5,500 MW of renewable energy to the national power grid once operational in the first half of 2027. Financial closes are expected by the fourth quarter of 2024.

Raad Al-Saady, Vice Chairman and Managing Director of ACWA Power, said: “Saudi Arabia is moving fast in its energy transition and we are proud to contribute as a key partner together with Badeel and Aramco. With these projects we reach 35,000 MW of renewable capacity that we control worldwide, which combined with almost 20,000 MWh of storage capacity make us one of the global leaders in the energy transition for reliable and affordable access to renewable energy at an unrivalled pace.”

Sultan AlNabulsi, Acting Chief Executive Officer from Badeel, said: “Badeel is proud to achieve this milestone for the new three Solar PV Projects, as an anchor sponsor under PIF to achieve its commitment to develop 70% of Saudi Arabia’s renewable energy by 2030. This comes as part of PIF continued efforts to progress towards unlocking the capabilities of promising sectors and achieving Saudi Arabia’s ambitions in Renewable Energy.”

As one of the world’s leading integrated energy and chemicals companies, SAPCO’s parent company Aramco is targeting investments in up to 12,000 MW of solar and wind energy by 2030. Aramco’s ambition is to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions across its wholly-owned and operated assets by 2050.

Waleed Al Saif, Aramco SVP of New Energies, said: “We are delighted to extend our partnership with ACWA Power and Badeel, providing further impetus for the Kingdom’s rapidly growing renewables sector. Together we are taking our renewables portfolio to the next level, advancing the energy transition and also helping meet rising demand for power with fewer emissions. Through our recently established new energies portfolio, Aramco aims to support the growth of alternative energy solutions including renewables, carbon capture and storage, and lower carbon hydrogen.”

Utilising the most advanced PV technology, the innovative designs of the plants will aim to ensure the highest efficiency, reliability, and performance. The energy output will cater to the rising demand in the country, with renewables and gas each planned to account for approximately 50% of domestic electricity production by 2030.

With this announcement, ACWA Power's overall portfolio of solar projects in Saudi Arabia now stands at 14, representing more than 17,800 MW of combined PV capacity. It also brings ACWA Power's total renewable capacity portfolio to 35,000 MW.  

PIF has identified utilities and renewables as one of the 13 strategic sectors in its planning. The development of Saudi Arabia’s renewable energy sector is also a core objective of Vision 2030; Saudi Arabia’s blueprint for a modern and diversified economy.