Saudi power producer ACWA Power and the Saudi Power Procurement Company (SPPC) have signed a power purchase agreement (PPA) to develop a 700MW solar farm in the Middle Eastern country.
The PPA is for the $450m Ar Rass solar photovoltaic independent power plant in Saudi Arabia’s Al Qassim province.
Ar Rass is expected to reach financial close in the fourth quarter of 2022.
Under the terms of the agreement, ACWA Power will sell energy produced by the solar plant to SPPC for 25 years.
Ar Rass is the largest PV project that has been tendered as part of Saudi Arabia’s National Renewable Energy Programme to date, for which ACWA Power has been earmarked to deliver 70% of the total 58.7GW target.
ACWA Power will hold a 40.1% stake in the facility, along with 20% by the Water and Electricity Holding Company (Badeel), a wholly owned PIF Portfolio Company.
State Power Investment Corporation from China will hold a 39.9% stake in Ar Rass.
The agreement was signed in the presence of His Royal Highness Prince Abdulaziz bin Salman bin Abdulaziz Al Saud, Saudi Arabia’s energy minister, who also said the aim is to launch several renewable energy projects totalling 15GW of capacity between 2022 and 2023.