Skip to content Skip to Search
Skip navigation

Financing agreed for $2.2bn Saudi solar project

solar panels, solar power, saudi arabia ACWA Power
ACWA Power's Sakaka PV solar facility in Sakaka City, Al Jouf Province, Saudi Arabia
  • 2060mw plant will provide electricity for 350,000 homes
  • Kingdom rapidly accelerating expansion of renewables capacity
  • ACWA Power, Aramco and PIF unit Badeel in consortium

Financing agreements worth $2.2 billion have been finalised and signed to build one of the world’s largest single site solar power projects in Saudi Arabia.

ACWA Power Co announced the deal for Al Shuaibah 1 and Al Shuaibah 2 PV projects in Mecca province, saying they will be funded by a combination of long-term debt and equity. 

A consortium of ACWA Power, Electricity Holding Company (Badeel), a unit of the Public Investment Fund, and Saudi Aramco are behind the ambitious solar plan, with ACWA Power holding a 35 percent equity stake.

The total financing includes a loan from the National Development Fund on behalf of the National Infrastructure Fund as well as a US-dollar denominated commercial facility from a consortium of local, regional and international banks.

The solar power facility is expected to start operations by the end of 2025. It will have a generating capacity of 2,060 megawatts (mw), which will provide enough electricity to power 350,000 homes. 

Al Shuaibah 2 – ACWA Power’s sixth solar plant in Saudi Arabia – will be slightly larger than Abu Dhabi’s 2,000mw Al Dhafra Solar PV.

The kingdom is accelerating efforts to expand its renewables capacity and aims to generate half its electricity from renewables by 2030.

As of 2021, just 0.2 percent of the kingdom’s electricity came from non-hydrocarbon sources, according to the BP Statistical Review of World Energy 2022.

ACWA and Badeel – both backed by the Saudi sovereign wealth fund – are also working together to develop three other solar projects that aim to power about 750,000 homes.

The projects, Ar Rass 2, Saad 2 and Al Kahfah, are valued at $3.3 billion in total and aim to produce a combined capacity of 4.5 gigawatts (gw).

Financial close is expected by the third quarter of 2023.

The Economist Intelligence Unit said in a research note earlier this year that it expects investment in clean energy projects to rise in Saudi Arabia, assisted by high oil prices in 2023‑24, but will likely fail to meet its 2030 target of 40gw.

Analysts added they expect Saudi Arabia to exploit current oil windfalls to accelerate its clean energy transition as the government aims to invest a total of $101 billion by the end of the decade.

In May, the Saudi Electricity and Water Regulatory Authority said it has qualified a list of 106 contractors and consultants to design, inspect, install and maintain small photovoltaic solar energy systems in homes and facilities across the kingdom.

The country also announced the development of 10 new solar and wind energy projects in its 2023 budget, as part of its strategy to slash oil use in electricity generation. They will have a combined total output capacity of 7gw. 

Last month, TotalEnergies reached financial closure to manage a $100 million solar photovoltaic power plant close to Riyadh as part of a consortium also comprising Japan’s Toyota Tsusho and Saudi Arabia’s Altaaqa Renewable Energy (Zahid Group).

The French oil major won the project in the third round of the kingdom’s national renewable energy programme. Construction started in June, with commercial operations expected to launch in early 2025.

Latest articles

Bruno Le Maire and Khaldoon Al Mubarak signed a France-UAE agreement on AI this week

UAE and France agree joint investments in AI

France and the UAE are to increase their collaboration in artificial intelligence, including joint investments, as they seek to become leaders in the AI sector. The French economy minister, Bruno Le Maire, signed a strategic agreement with Khaldoon Al Mubarak, chief executive of the UAE investment fund Mubadala and a member of the Abu Dhabi […]

Saudi Data and Artificial Intelligence Authority (SDAIA) director Dr Esam bin Abdullah Al-Wagait

IBM to help Saudi Arabia train AI models in Arabic

Saudi Arabia has signed a deal with US tech giant IBM to develop the kingdom’s generative artificial intelligence (AI) capabilities. The Saudi Data and Artificial Intelligence Authority (SDAIA) said on Tuesday that its Arabic language AI model, ALLaM, will be trained on IBM’s platform to run more efficiently. This will also add new language skills […]

Marina Storti, CEO of WTA Ventures, front right, and Kevin Foster, head of communications at PIF, front left, at the signing of the sponsorship agreement between the two

PIF to sponsor women’s world tennis rankings

Saudi Arabia’s Public Investment Fund (PIF) is giving its name to the women’s world tennis rankings, the latest sponsorship deal in the kingdom’s drive to dominate global sports.  “The PIF WTA Rankings will track players’ journeys, and PIF will work with the WTA to celebrate and support players’ progress,” PIF said, calling the deal “multi-year”.  […]

Adnoc’s investment in Mozambique aligns with its expansion strategy for a lower-carbon LNG portfolio

Adnoc buys 10% in LNG project in Mozambique

Abu Dhabi National Oil Company (Adnoc) has acquired a 10 percent stake from Portugal’s Galp Energia in the Rovuma basin concession in Mozambique as part of its global growth strategy.  The acquisition will allow the UAE energy major a share of the liquefied natural gas (LNG) production from the concession, which has a combined production capacity […]