HomeMiddle East Market ›ACWA Power, PIF and Aramco to Reach Financial Close for Al Shuaibah 1 and 2 Solar Projects

ACWA Power, PIF and Aramco to Reach Financial Close for Al Shuaibah 1 and 2 Solar Projects

ACWA Power, a Saudi-listed company, Badeel, wholly owned by Public Investment Fund (PIF), and Saudi Aramco Power Company (SAPCO), an entirely owned subsidiary of Aramco announces the successful financial close of Al Shuaibah 1 and Al Shuaibah 2 solar PV projects which will produce an aggregate capacity over 2.6GW of clean electricity for Saudi Arabia.

August 22, 2023. By Nivedita Ojha

ACWA Power, a Saudi-listed company, the Water and Electricity Holding Company (Badeel), wholly owned by Public Investment Fund (PIF), and Saudi Aramco Power Company (SAPCO), an entirely owned subsidiary of Aramco announces the successful financial close of Al Shuaibah 1 and Al Shuaibah 2 solar PV projects which will produce an aggregate capacity over 2.6GW of clean electricity for Saudi Arabia.

The financial close for the Projects is a key achievement in the National Renewable Energy Program (NREP) which is led and supervised by the Ministry of Energy and is a key achievement towards PIF’s commitment to develop 70% of Saudi Arabia’s Renewable Energy Target Capacity by 2030.

Saudi Power Procurement Company (SPPC) is the procurer and the off-taker for the projects, while the new projects will be jointly together owned by Badeel (34.99 percent), ACWA Power (35.01 percent), and SAPCO (30 percent).

The USD 1.63 billion senior debt financing for this plant comprises a USD 450 million, Saudi Riyal-denominated loan from the National Development Fund on behalf of the National Infrastructure Fund (Under Establishment) as well as a USD 1.18 billion, US-dollar denominated commercial facility from a consortium of local, regional and international banks (Bank Saudi Fransi, First Abu Dhabi Bank, Mizuho Bank, Riyad Bank, Saudi National Bank, Standard Chartered Bank and Saudi Investment Bank).

Aramco’s investment in Al Shuaibah 1 and Al Shuaibah 2 Solar PV Projects through SAPCO is its second participation in the National Renewable Energy Program; aligning with the company’s objectives of achieving net-zero of operational scope-1 and scope-2 emissions by 2050.

PIF, through Water and Electricity Holding Company (Badeel), in partnership with ACWA Power as a lead developer is executing a total of five NREP projects, with a cumulative capacity of 8GW and over USD 6 billion of investment from PIF and its partners.

These projects - Sudair, Al Shuaibah 2, Ar Rass 2, Al Kahfah, Saad 2 - are aiming to enable and support the local private sector through requirements for significant local content contribution and the procurement of equipment, supplies, and services through local supply chains.

Located in Al Shuaibah in the Makkah Province, the Al Shuaibah PV 1 and Al Shuaibah PV 2 will have a capacity of 600 MW and 2,031 MW respectively and are capable of powering approximately 450,000 households. The total investment in the plant amounts to USD 2.37 billion, and commercial operations will commence in 2025.

Marco Arcelli, CEO of ACWA Power stated, “Securing financing for this groundbreaking project marks a significant step towards achieving Saudi Arabia’s clean energy goals, in alignment with the National Renewable Energy Program, which aims to generate 50% of electricity from renewable sources by 2030. " "We are truly proud of this milestone and look forward to working closely with our key partners PIF, Aramco, and other contributors to successfully realise a sustainable future," he added.

Husam Al-Ghailani, CEO of Badeel, added, “Reaching the financial close for Al Shuaibah 1 and Al Shuaibah 2 Solar PV Projects marks a significant milestone for Badeel,, and gives us the drive to continue our efforts to support the continuing growth of renewable energy in the Kingdom and contribute towards PIF’s commitment to develop 70% of Saudi Arabia’s renewable energy by 2030, which will contribute to unlocking the capabilities of promising non-oil sectors to enhance Saudi Arabia’s efforts in diversifying revenue sources and to enhance its leading role in the renewable energy sector locally and globally. “

With the addition of these two projects, ACWA Power's solar portfolio in Saudi Arabia now exceeds 12GW of combined PV capacity. This includes the recent inclusion of three new projects with PIF subsidiary Badeel: the 2GW Ar Rass 2, 1.125GW Saad 2, and 1.4GW Al Kahfah solar plants. Overall, ACWA Power's global portfolio of renewable energy capacity stands at 23.4GW.
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