A group of banks and Saudi utility developer ACWA Power have inked financing deals totalling SR9.7 billion ($2.58 billion) for the development of three significant solar power projects in Saudi Arabia. An important development in Saudi Arabia’s drive towards renewable energy is this finance arrangement.
Project Sites and Available Resources
The three solar projects will be situated in the Makkah and Qassim provinces in Haden, Muwyah, and Al-Khushaybi, according to a statement sent to the Saudi stock exchange Tadawul. With capacity of 2,000 megawatts, 2,000 megawatts, and 1,500 megawatts, respectively, these projects will rank among the largest solar systems in the Kingdom.
Principal Players in the Projects
Three firms, Buraiq Renewable Energy Co., Moya Renewable Energy Co., and Nabah Renewable Energy Co., have signed the finance agreements. These companies will be jointly held by Saudi Aramco Power Co., Badeel, a Public Investment Fund (PIF) subsidiary, and ACWA Power. In each project firm, ACWA Power owns a 35.1% share, while Badeel has a 34.9 percent stake.
Saudi Arabia’s Exuberant Objectives for Renewable Energy
These initiatives highlight Saudi Arabia’s determination to increase its influence in the world’s renewable energy market. By 2030, the Kingdom hopes to have produced 130 gigawatts of renewable energy. This is a component of a larger plan to lower carbon emissions, increase sustainable development, and diversify the energy mix. Saudi Arabia wants to get at least half of its electricity from renewable sources by the end of this decade.
Partners in Finance Involved
These solar projects are being financed by a consortium including local, regional, and global banks. Banque Saudi Fransi, Emirates NBD, First Abu Dhabi Bank, HSBC, Mizuho Bank, Riyad Bank, Saudi National Bank, and Standard Chartered Bank are among the notable financial institutions involved. These agreements have a 27.3-year funding period, and ACWA Power’s guarantee is restricted to its equity bridge loan and standby equity.
The Participation of ACWA Power in Saudi Arabia’s Green Energy Projects
Driving the Kingdom’s green energy programs is ACWA Power, a company that is traded on the main market in Saudi Arabia. Additionally, by concentrating on high-growth markets that prioritise renewable energy solutions, the organisation is broadening its global reach.
Raising Capital to Fund a New Growth Plan
A secondary statement from ACWA Power stated that it has selected SNB Capital, J.P. Morgan Saudi Arabia, and Citigroup Saudi Arabia as financial advisors for a $7.12 billion capital raising. The company’s new growth strategy, authorised in 2023, which intends to treble its operations by 2030, is in line with this capital increase.
An increase in net profit in 2024’s first half
For the first half of 2024, ACWA Power recorded a net profit of SR926.79 million, which represents a 35.46 percent increase over the same time in 2023. The corporation ascribed this increase in profits to higher financing income, more revenues, and a larger portion of profits from equity-accounted investees.
Through securing substantial funding for these solar projects and establishing ambitious expansion goals, ACWA Power is still a major player in determining the direction of renewable energy in Saudi Arabia and around the world.
