Saudi Acwa Power And PIF To Build The Largest Solar Power Plant in Mecca

A division of Saudi Arabia's Public Investment Fund and Acwa Power have signed an agreement to develop a solar power plant in Makkah with a total capacity of 2.1 GW. The facility will be the largest of its kind in the Middle East. The project will be jointly owned by Hydropower Holding and Acwa Power, with both parties holding a 50% stake through a joint venture.

In a statement to the Saudi Stock Exchange Tadawul, Acwa Power said the newly formed venture - Shuaibah II Electric Energy Company - had signed a power purchase agreement with the Saudi Electricity Purchasing Company for US$1.75 billion worth of its shares. This marks a key achievement in PIF's commitment to develop 70 per cent of Saudi Arabia's renewable energy by 2030, said Yazeed Al Humied, PIF's deputy governor and head of investments for the Middle East and North Africa. Utilities and renewable energy is one of PIF's priority sectors as part of its domestic strategy, which focuses on unlocking the capacity of promising sectors to enhance Saudi Arabia's efforts to diversify its revenue streams.

Saudi Arabia is focusing heavily on renewable energy as it looks to meet its climate commitments while moving away from oil exports. State-owned oil exporter Saudi Aramco has set up a $1.5 billion sustainability fund to invest in breakthrough technologies and start-ups to help combat climate change. Managed by Saudi Aramco's venture capital arm, the fund will invest in technologies that support the energy company's 2050 net zero target, while helping to develop new low-carbon fuels.

Acwa Power operates in 13 countries in the Middle East, Africa, Central Asia and South East Asia. It has a portfolio of 67 assets with a total investment of US$66.5 billion, generating approximately 43 GW of electricity and 37% of its total capacity in renewable energy. The signing of the new project comes as Acwa Power continues to roll out its renewable energy portfolio globally, with the Riyadh-based utility developer revealing plans in November to build a 10 GW wind farm in Egypt in partnership with the North African country's New and Renewable Energy Authority and the Egyptian Electricity Transmission Company.

The company has also signed a US$12 billion deal to develop new energy projects in Uzbekistan, including the world's largest single onshore wind project in the country's Karakalpakstan region, with a total capacity of 1.5 GW. It has also been selected as the preferred bidder to develop two solar power plants in Indonesia, South East Asia's largest economy, as it continues to develop projects in different countries.

Acwa Power aims to reach around 120 GW of capacity and operate in 20 countries over the next 10 years, its chief financial officer Abdulhameed Al Muhaidib recently told The National. it plans to raise more funds to finance its growth plans by issuing bonds by the end of 2022 or early next year.