A consortium backed by Saudi Arabia’s sovereign wealth Public Investment Fund (PIF) has signed a 25-year power purchase agreement with Saudi Power Procurement Company for electricity from an up to 1500MW solar farm.
Initial commissioning of the Sudair project, located in Sudair Industrial City, is expected in the second half of 2022.
Sudair will have an investment value of SAR3.4bn (€761m) and will be capable of powering 185,000 homes and offsetting nearly 2.9 million tonnes of carbon dioxide emissions per year.
It will deliver electricity at a price of $12.39 (€10.40) a megawatt-hour.
The PIF-backed consortium is led by ACWA Power, in which PIF holds a 50% stake, which has partnered with Badeel, a 100%-owned PIF portfolio company.
PIF governor Yasir Al-Rumayyan said: “The Sudair solar PV plant and the signing of this important agreement embody PIF’s commitment to invest in sectors that will shape the future of the global economy.
“The renewable energy sector is a critical sector that provides sustainable solutions against the challenges of climate change, through developing projects aimed at reducing carbon emissions.
“The launch of Sudair contributes toward achieving the Kingdom’s vision in expanding the use of renewable energy, localising cutting-edge technologies, and benefiting from Saudi Arabia’s natural resources to develop this sector.
“It also embodies PIF’s strategy to launch promising sectors that enable and support the private sector, and aims to increase PIF and its portfolio companies’ contribution to local content by 60%, as well as expanding opportunities for local companies to contribute to the Fund’s projects.
“We are also delighted to announce our consortium with ACWA Power. Delivering a project of this size and scope will require a broad range of experience and expertise, and we have the best possible partners in place to succeed.”
ACWA Power chairman Mohammad Abunayyan said: “With the world having reached a critical juncture in developing solutions to urgently address climate change, Saudi Arabia is proud of its leading role in driving the energy transition effort.
“As the first project under the PIF renewables programme, the Sudair solar PV plant holds special significance, marking the advancement of the journey towards a sustainable economy.
“It is a great honour to partner with PIF in efficiently participating in enhancing local content by unlocking opportunities for Saudi companies in the renewables sector under the guidance of our visionary leadership and the Ministry of Energy.”