There has been a major shift in Saudi Arabia’s approach to renewable energy.
This was underlined last week when further details of the Kingdom’s renewable energy drive were laid out, which are distinct from earlier recommendations made by the King Abdullah City for Atomic and Renewable Energy (KACARE).
There is a huge difference in the two approaches. The first initiative was considered by many analysts as over-optimistic, given the aim to generate around 62 gigawatts (GW) of power from renewable energy sources. That drive would have required at least $109 billion of investments, according to reports.
Under the current initiative, the Kingdom will only generate around 9.5GW of power from renewables, accounting for 10 percent of the country’s energy needs by 2023. The Kingdom currently has around 200 megawatts (MW) of installed renewable energy capacity and going from there to 9.5GW sounds like a more realistic goal. Moreover, it will only require between $30 to $50 billion worth of investments, Saudi Energy Minister Khalid Al-Falih had said earlier this year in Davos.
The KACARE initiative was a general plan whereas the new initiative is part of the National Transformation Program (NTP) 2020 and Saudi Vision 2030 reforms.
What is unique about the current renewable energy initiative is that private investors will build, operate and own the solar and wind plants for 20 and 25 years, depending on the nature of the project, Turki Alshehri, head of the renewable energy project development office at the Ministry of Energy told reporters on Monday. The government will not own any of the plants, he said.
Another unique aspect of this initiative is that the ministry wants to create a fully integrated local private industry for renewables. It wants to go beyond that by making that industry export-oriented, meaning that it wants to sell power to other countries and manufacture renewable-energy equipment to sell overseas.
The Kingdom is restructuring its energy sector as part of the Vision 2030 reforms, and a focus on renewable projects is a pillar of this transformation, as it would help develop the private sector and create thousands of jobs.
Saudi Arabia has reportedly shortlisted 27 companies for a solar-power project and 24 firms for its wind project. It is inviting bids for the first round of renewable projects that comprises a 400MW wind farm project in Midyan in the northwest and a 300MW solar project.
The Kingdom also plans to launch a second bidding round for a 400MW wind power project in Domat Al-Jandal in Al-Jouf Province by the fourth quarter of this year, which will be followed by 620MW of solar power, Alshehri said. “This will come in stages. It (the wind power project) will come in the fourth quarter of this year with Domat Al-Jandal, and then the 620MW (solar project) will come immediately after that in phases,” he was reported as saying by Reuters.
Private investors key to Saudi Arabia’s renewable energy plan
Private investors key to Saudi Arabia’s renewable energy plan
Closing Bell: Saudi main market closes the week in red at 10,526
RIYADH: Saudi equities ended Thursday’s session modestly lower, with the Tadawul All Share Index slipping 14.63 points, or 0.14 percent, to close at 10,526.09.
The MSCI Tadawul 30 Index also declined 3.66 points, or 0.26 percent, to 1,389.66. In contrast, the parallel market outperformed, as Nomu jumped 237.72 points, or 1.02 percent, to close at 23,430.93.
Market breadth on the main market remained tilted to the downside, with 156 stocks ending lower against 99 gainers.
Trading activity eased further, with volumes reaching 80.46 million shares and total traded value amounting to SR1.66 billion ($442 million).
On the movers’ board, Saudi Industrial Export Co. led the gainers, rising 6.6 percent to SR2.10, followed by Consolidated Grunenfelder Saady Holding Co., which advanced 6.43 percent to SR9.60.
Raoom Trading Co. climbed 4.36 percent to SR61.05, while Astra Industrial Group gained 4.35 percent to close at SR139. Riyadh Cables Group Co. added 3.77 percent to end the session at SR135.00.
On the downside, Methanol Chemicals Co. topped the losers’ list, falling 5.96 percent to SR7.41.
Flynas Co. retreated 5.43 percent to SR61.00, while Leejam Sports Co. dropped 5 percent to close at SR100.80.
Alramz Real Estate Co. slipped 4.64 percent to SR55.50, and Almasane Alkobra Mining Co. declined 4.55 percent to SR84.00.
On the announcement front, ACWA Power said it has completed the financial close for the Ras Mohaisen First Water Desalination Co., a reverse osmosis desalination project with a capacity of up to 300,000 cubic meters per day, alongside associated potable water storage facilities totaling 600,000 cubic meters in Saudi Arabia’s Western Province.
The project was financed through a consortium of local and international banks, with total funding of SR2.07 billion and a tenor of up to 29.5 years, while ACWA Power holds an effective 45 percent equity stake.
Shares of ACWA Power ended the session at SR185.90, up SR0.2, or 0.11 percent.
Meanwhile, Consolidated Grunenfelder Saady Holding Co. announced the sign-off of a customized solutions project with Saudi Aramco Nabors Drilling Co., valued at SR166.0 million excluding VAT.
The 24-month contract covers the sale and maintenance of field camp facilities, with the financial impact expected to begin from the first quarter of 2026.
