Acwa Power, a leading utility developer based in Riyadh, has successfully met the initial requirements for drawing down senior loans for three significant solar photovoltaic (PV) projects in Saudi Arabia, boasting a total capacity of 4,550MW.
Together with its partner, Water & Electricity Holding Company (Badeel), the company had previously secured power-purchase agreements with the Saudi Power Procurement Company to foster the development and operation of these projects in May of the previous year.
These solar endeavors are strategically sited within the central and northern regions of the kingdom and are detailed as follows:
- Al Rass 2: 2,000MW
- Saad 2: 1,125MW
- Al Kahfah: 1,425MW
The estimated investment for these projects stands at approximately SR12.8bn ($3.4bn).
A consortium of banks has agreed to provide senior debt financing totaling SR8.6bn ($2.3bn), including:
- Banque Saudi Fransi (Saudi Arabia)
- HSBC (UK)
- Mizuho Bank (Japan)
- Riyad Bank (Saudi Arabia)
- Saudi Awwal Bank (Saudi Arabia)
- Saudi National Bank (Saudi Arabia)
- Standard Chartered Bank (UK)
The financing agreement spans 27.75 years and is structured as non-recourse debt, meaning Acwa Power, which holds a 50.1% equity stake in the projects, is not personally liable. Badeel, a subsidiary of the Public Investment Fund (PIF), holds the remaining 49.9% equity.
These projects represent a significant stride in the kingdom’s National Renewable Energy Programme (NREP), bringing the total number of solar PV contracts awarded under the initiative to five. Previously awarded were the 1,500MW Sudair solar PV in 2021 and the 2,060MW Shuaibah 2 solar PV in 2022.
Badeel, wholly owned by the PIF, plays a pivotal role in achieving 70% of the NREP’s target capacity through the kingdom’s Price Discovery Scheme. Additionally, PIF retains a 44% stake in Acwa Power.
While the levelised electricity cost for the three new schemes has not been disclosed, these projects elevate Acwa Power-led solar PV contracts in Saudi Arabia to a total of ten, cumulatively reaching an impressive capacity of 10GW.