Saudi Arabia to back clean energy makers, developers via new loan scheme

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
A Suntech installation in Saudi Arabia. Credit: Suntech

Saudi Arabia is expanding the reach of its 105 billion riyal (US$28 billion) industrial fund to spur renewables through loans to component manufacturers, to independent power projects and to projects spearheaded by firms in other industries.

The new programme comes to expand the Saudi Industrial Development Fund’s work over the past 45 years, during which it has “played a key role” in driving industrial development in the kingdom, according to a government release.

The new incentives are part of Saudi Vision 2030, Crown Prince Mohammad bin Salman’s plan to diversify the economy of the world’s largest oil exporter. In January, the government announced it would deploy 60GW of renewables by 2030, two-thirds of which would be solar.

Under the new scheme, named for the Arabic word for renewables Mutjadeda, component manufacturers can borrow up to 75% of a project's cost from the government and benefit from loan repayment periods of up to 20 years and grace periods of up to 36 months. Independent renewable energy production projects can apply for the same repayment and grace periods.

Players in other industries deploying renewables can apply for loans with repayment periods of up to 12 years and grace periods of 36 months.

Bloomberg reports that loans will be for as much as 1.2 billion riyals (US$320 million).

The government’s pivot to renewables comes after a drone strike on the kingdom’s Abqaiq processing facility in mid-September cut global oil output by five percent and sent oil prices skyrocketing.

Saudi Arabia's new loan scheme sees the light in a year set to conclude with the second round of government renewable auctions. 

A spokesperson from the Renewable Energy Project Development Office (REDPO) told PV Tech in an email that while the government agency does not currently have an exact date when auction results will be published, their announcement will take place in December and will be broadcast live. 

Saudi Arabia’s solar industry is poised for rapid growth, according to an analysis by Wood Mackenzie. In July, the firm placed the Gulf state within a 20-strong cohort of global “growth [solar] engines,” countries that are expected to be installing between 1-5GW of the energy source a year by 2024.

Read Next

PV Tech Premium
June 4, 2021
Spain’s PV sector has been boosted by a new auction mechanism that aims to support at least 10GW of capacity by 2025. José Donoso, general director of Spanish solar association UNEF, discusses what is driving growth and the various policies that the industry is asking for.
June 3, 2021
US power grid operator PJM Interconnection’s latest capacity auction for 2022/2023 saw 1,512MW of solar procured, up 942MW on its most recent auction in 2018.
June 2, 2021
Scatec will develop three projects in South Africa totalling 540MW of solar and 225MW / 1,140MWh of battery storage after being awarded preferred bidder status through a government tender.
June 2, 2021
Renewables are set to account for 70% of global investment in new power generation capacity this year with solar PV leading the growth, but spending on clean energy must accelerate much more rapidly if the world is to meet its climate goals.
June 1, 2021
Financial commitments for utility-scale renewables projects in Australia have slowed to the lowest level in the past five years, according to the Clean Energy Council (CEC), which revealed investment in large-scale batteries in the country is booming.
June 1, 2021
Lightsource BP has said it won more than 40% of the total awarded capacity in Greece’s renewables auction last week through a co-development partnership, increasing its global presence to 14 countries.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
July 6, 2021
Solar Media Events
August 24, 2021
Solar Media Events, Upcoming Webinars
October 6, 2021