Saudi power developer ACWA Power has secured loan financing of US$2.3 billion (SAR8.6 billion) to support the construction of three new solar projects in Saudi Arabia, with a combined capacity of 4.55GW.
The company announced the portfolio last May, signing an agreement with Badeel, the water and electric holding company of the Saudi Public Investment Fund (PIF), for the projects. ACWA Power will retain a 50.1% equity in each of the projects, while Badeel will hold the remaining equity.
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While ACWA Power initially expected to reach financial close for the projects in the third quarter of last year, the company only acquired the latest round of loan funding from a consortium of banks last week.
This consortium includes Saudi banks Riyad Bank, Banque Saudi Fransi, Saudi Awwal bank and the Saudi National Bank, in addition to overseas investors Mizuho Bank, Standard Chartered and HSBC. With the latest round of loan funding in place, the total investment in these new solar projects will come to US$3.4 billion, a considerable sum that could go a long way towards helping Saudi Arabia reach its ambitious clean energy goals.
While the government aims to meet half of the country’s energy demands with renewable power by 2030, renewables accounted for just 1.3% of the Saudi energy mix in 2023. Developers will need to add 58.7GW of new renewable capacity by the end of this decade if the government is to reach its clean power generation target, and with the development of these projects, the PIF has now supported five solar projects through the government’s National Renewable Energy Programme.
The five projects have a combined capacity of 8.1GW, and both significant financial investment, and the backing of a range of investors, could be vital to achieving the government’s clean power goal.
Last October, Chinese solar module manufacturer JinkoSolar agreed to supply 3.8GW of panels to ACWA Power, for use at the Ar Rass 2 project and the Al Kahfah facility, two of the projects in the company’s 4.55GW portfolio.
