RIYADH: Saudi utility firm ACWA Power has signed power purchase agreements with the Water and Electricity Holding Co. to develop the biggest solar plant of its kind in the Middle East, with capacity to power 350,000 homes.
The 2,060 MW solar photovoltaic plant will be built in Al Shuaibah, Makkah province and is expected to begin commercial operations by the fourth quarter of 2025.
Known as Badeel, the Water and Electricity Holding Co., wholly owned by the Public Investment Fund, will jointly own the project with ACWA Power, with both companies holding a 50 percent equity stake each.
The project will be executed through a newly formed joint company called Shuaibah Two Electrical Energy Co..
Yazeed A. Al-Humied, deputy governor and head of MENA Investments at PIF, said: "This marks a key achievement toward PIF’s commitment to develop 70 percent of Saudi Arabia’s renewable energy by 2030.
“Utilities and renewables is one of PIF’s priority sectors as part of its domestic strategy, which focuses on unlocking the capabilities of promising sectors to enhance Saudi Arabia’s efforts in diversifying revenue sources.”
In this regard, the Shuaibah Two Electrical Energy Co. signed a power purchase agreement with the Saudi Power Procurement Co..
The $1.75-billion contract spread over 35 years will include the development, financing, building, own, and operation of 2060 MW of the Shuaibah Two PV solar energy plant.
The project is part of Saudi Arabia’s energy transition strategy, highlighting how a giga-scale development in sustainable energy will play a key role in translating Vision 2030 goals.
“Under the guidance of our visionary leadership and the Ministry of Energy, Saudi Arabia continues to accelerate its ambitious plans for diversifying its energy mix to include renewable energy. It is a great honor to partner with Badeel and SPPC in developing this milestone project which will set a benchmark for sustainable energy development in the region,” said Mohammad Abunayyan, chairman, ACWA Power.
He said solar power is a key component in unlocking positive economic, environmental and social outcomes for the betterment of communities across our great nation, adding: “We remain committed to developing local capabilities in technology, supply chain, and talent and ensure they are realized to their fullest potential.”
Badeel and ACWA Power will build, own, and operate Al Shuaibah 2 facility and the electricity produced will be sold to SPPC.
Shuaibah 2 is ACWA Power’s sixth solar energy facility in Saudi Arabia, with its portfolio comprising 13 power, water desalination and green hydrogen plants.
Badeel and ACWA Power are also developing the Sudair Solar PV 1500 MW project; which was the first cornerstone renewable energy project in PIF’s program.
