ACWA Power, Badeel, and SAPCO Secure $3.2 Billion Financial Close for Groundbreaking Solar Projects in Saudi Arabia
In a landmark development for Saudi Arabia’s renewable energy landscape, ACWA Power, in collaboration with Public Investment Fund (PIF)-owned Badeel and Saudi Aramco Power Co. (SAPCO), has reached a financial close for three significant solar photovoltaic (PV) projects. These projects, collectively worth $3.2 billion, will contribute a combined capacity of 5.5 gigawatts (GW), positioning them as key components in the Kingdom’s long-term renewable energy strategy.
Introduction to the Projects
The three solar PV projects—Haden, Muwayh, and Al Khushaybi—are part of Saudi Arabia’s National Renewable Energy Program, overseen by the Ministry of Energy. These initiatives form an integral part of the Kingdom’s Vision 2030, which seeks to diversify the nation’s energy sources, reduce its reliance on fossil fuels, and promote sustainable growth through the development of renewable energy. The PIF has committed to producing 70% of the Kingdom’s renewable energy capacity, with the solar PV projects playing a crucial role in meeting these ambitious goals.
Strategic Importance of the Financial Close
Reaching financial close on these projects marks a major milestone for ACWA Power, Badeel, and SAPCO, underscoring their commitment to Saudi Arabia’s energy transition. With Haden and Muwayh plants contributing 2 GW each and Al Khushaybi delivering 1.5 GW, the combined capacity of 5.5 GW will provide substantial clean energy to support the Kingdom’s growing power needs.
According to Marco Arcelli, CEO of ACWA Power, “The financial closure of these projects reflects our dedication to providing clean, consistent, and cost-effective energy. We are grateful to our stakeholders and financial partners for their invaluable support in making this vision a reality.” The projects will also help reduce greenhouse gas emissions and contribute to global efforts to combat climate change.
Location and Ownership of the Projects
The Haden and Muwayh plants are strategically located in the Makkah region, while the Al Khushaybi plant is situated in the Qassim region. These locations were chosen not only for their solar potential but also for their proximity to growing population centers and industrial hubs, where the demand for energy is rising rapidly.
Ownership of the projects will be shared between Badeel, ACWA Power, and SAPCO, with the Saudi Power Procurement Co. acting as the procurer and off-taker for the electricity generated. This ownership structure reflects the strong collaboration between private and public entities in driving forward Saudi Arabia’s renewable energy ambitions.
Financing of the Projects
Securing $3.2 billion in financing for the three solar PV projects involved a consortium of local, regional, and international banks. The $2.5 billion senior debt financing was provided by prominent financial institutions, including Banque Saudi Fransi, Mizuho Bank, Riyad Bank, Saudi National Bank, Standard Chartered Bank, Emirates NBD, First Abu Dhabi Bank, and HSBC. These banks played a pivotal role in ensuring that the projects could move forward, underscoring their confidence in Saudi Arabia’s renewable energy sector.
The financial close demonstrates the trust and confidence that international investors and financial institutions have in Saudi Arabia’s renewable energy vision. Sultan Al-Nabulsi, Acting CEO of Badeel, highlighted the significance of this milestone, stating, “Reaching the financial close of these solar PV projects represents a major achievement in our journey to support Saudi Arabia’s rapidly growing renewable energy sector and contribute to PIF’s commitment to developing 70 percent of the Kingdom’s renewable energy by 2030.”
National Renewable Energy Program and Vision 2030
Saudi Arabia’s National Renewable Energy Program is a key pillar of Vision 2030, an ambitious initiative aimed at transforming the Kingdom’s economy and reducing its dependence on oil. The program seeks to increase the share of renewable energy in the national energy mix while promoting innovation and sustainability. With PIF leading efforts to develop 70% of the Kingdom’s renewable energy capacity, these solar PV projects are critical in achieving the national targets.
The projects are expected to support the country’s energy needs while also reducing emissions and lowering the cost of power generation. As Saudi Arabia continues its energy transition, investments in renewable technologies such as solar PV and wind are expected to accelerate, further reducing the Kingdom’s carbon footprint and fostering economic diversification.
PIF’s Broader Renewable Energy Strategy
The financial close of these solar projects is part of PIF’s broader strategy to invest in renewable energy across the value chain. In recent months, PIF has announced several joint ventures aimed at boosting local production of wind turbine and solar PV components. This move not only supports the global energy transition but also positions Saudi Arabia as a leading hub for renewable energy manufacturing.
In July 2024, PIF revealed its plans to develop additional renewable energy projects with a combined capacity of 13.6 GW, representing investments of over $9 billion. These projects include the Sudair, Shuaibah 2, Ar Rass 2, Al Kahfah, and Saad 2 developments, all of which are expected to contribute significantly to the Kingdom’s renewable energy portfolio. By supporting local private sector development through increased domestic supply chain participation, PIF is fostering a sustainable and self-reliant renewable energy industry in Saudi Arabia.
Impact on Saudi Arabia’s Renewable Energy Landscape
The successful financial close of the Haden, Muwayh, and Al Khushaybi solar PV projects will have a profound impact on Saudi Arabia’s renewable energy landscape. With the addition of these three new projects, ACWA Power’s solar portfolio in Saudi Arabia now includes 14 projects, totaling more than 17.8 GW of combined PV capacity. This brings ACWA Power’s total renewable energy capacity portfolio to an impressive 35 GW, making it one of the key players in the Kingdom’s renewable energy sector.
These projects are expected to help Saudi Arabia meet its growing energy demand while also reducing its carbon emissions. According to Waleed Al-Saif, Senior Vice President of New Energies at Saudi Aramco, “We are pleased to extend our partnership with ACWA Power and Badeel, providing further impetus for the Kingdom’s rapidly growing renewables sector. Together, we are advancing the energy transition to meet the rising demand for power with fewer emissions.”
A Pivotal Step in Saudi Arabia’s Energy Transition
The financial close of the Haden, Muwayh, and Al Khushaybi solar PV projects represents a pivotal moment in Saudi Arabia’s energy transition. As the Kingdom continues to prioritize sustainability and diversify its energy mix, these projects will play a critical role in ensuring a reliable, clean, and cost-effective energy supply.
ACWA Power, Badeel, and SAPCO’s successful collaboration on these projects highlights the importance of public-private partnerships in achieving national renewable energy goals. As Saudi Arabia moves closer to realizing its Vision 2030 objectives, these solar PV projects will serve as a blueprint for future renewable energy developments, ensuring that the Kingdom remains a global leader in the energy transition.
The successful execution of these projects also sends a strong message to the global community about Saudi Arabia’s commitment to addressing climate change and contributing to a more sustainable future. With continued investments in renewable energy, Saudi Arabia is poised to become a major player in the global clean energy market, helping to shape the future of energy for generations to come.