In a landmark investment move, a strategic partnership involving Acwa Power, Saudi Arabian Oil Company (commonly known as Saudi Aramco), and Saudi Arabia's Public Investment Fund has secured funding of approximately 9.7 billion Saudi riyals. This substantial financial backing, confirmed on August 29, is earmarked for the development of three innovative solar photovoltaic power plants located within the kingdom. A diverse consortium of financial institutions, both local and international, including prominent names such as Banque Saudi Fransi, Emirates NBD, First Abu Dhabi Bank, HSBC, Mizuho Bank, Riyad Bank, Saudi National Bank, and Standard Chartered Bank, has committed to financing the comprehensive development, design, construction, and operational phases of these significant projects.
The financing arrangement spans an impressive duration of 27.3 years, indicating a long-term commitment to renewable energy initiatives in the region. The three solar power facilities, designated as Haden, Muwayh, and Al Khushaybi, are strategically situated in Makkah and Qassim Province. Collectively, they boast a remarkable production capacity, with each plant generating 2,000 megawatts, 2,000 MW, and 1,500 MW, respectively.
Notably, Acwa Power holds a 35.1% ownership stake in the respective project companies, Buraiq Renewable Energy, Moya Renewable Energy, and Nabah Renewable Energy. Additionally, Badeel, a subsidiary fully owned by the kingdom's sovereign wealth fund, the Public Investment Fund, commands a significant 34.9% share in all three project companies. These ventures are not the first for this trio of partners.
They had previously invested 3.4 billion riyals into the 1,500-MW Sudair solar project, which proudly stands as the largest single-contracted solar photovoltaic installation in Saudi Arabia, as highlighted on Sapco's official site. Furthermore, the Saudi Aramco unit, Saudi Aramco Power (often referred to as Sapco), holds a 30% stake in this project, with the remaining 70% equally split between Badeel and Acwa Power. The ongoing investments align closely with the Public Investment Fund’s ambitious vision of developing a substantial 70% of Saudi Arabia's renewable energy capabilities by the year 2030.
With this in mind, these projects not only enhance Acwa Power's impressive portfolio—currently comprising 90 assets in various stages of operation, construction, or advanced development across 13 different countries—but also reinforce the kingdom's commitment to sustainable energy practices. In a separate yet equally significant announcement, Acwa Power has appointed Citigroup Saudi Arabia, SNB Capital, and J.P.
Morgan Saudi Arabia as financial advisers for an anticipated rights offering valued at 7.13 billion riyals. This strategic decision, revealed through a Sunday filing, is crucial as the company seeks to gain regulatory and shareholder approvals for the capital increase, which will support its goal of tripling its assets under management by 2030. Market reactions to these developments have been mixed; shares of Acwa Power saw a decline of approximately 2% during recent trades, while Saudi Aramco experienced a slight decrease as well.
This volatility highlights the dynamic and often unpredictable nature of investments in the expanding renewable energy sector, as stakeholders navigate a rapidly evolving landscape of opportunities and challenges..