A unit of Saudi Arabia's Public Investment Fund and Acwa Power signed an agreement to develop a solar farm in Mecca with a total capacity of 2.1 gigawatts. The facility will be the largest of its kind in the Middle East. The project will be jointly owned by Hydro Holdings and Acwa Power, which hold a 50 per cent stake through a joint venture.
Acwa Power said in a statement to the Saudi stock exchange Tadawul that the newly formed enterprise - Shuaiba II Power Company - had signed a power purchase agreement worth $1.75 billion with Saudi Power Procurement Company and its shares traded. This marks a key achievement in the PIF's commitment to develop 70 percent of Saudi Arabia's renewable energy by 2030, said Yazeed Al Humied, PIF Vice President and Head of Investment for the Middle East and North Africa. Utilities and renewable energy are among the priority sectors of the PIF as part of its domestic strategy, which focuses on unlocking the capacity of promising industries to strengthen Saudi Arabia's efforts in diversifying revenue sources.
Saudi Arabia is focusing heavily on renewable energy as it looks to meet its climate commitments while moving away from oil exports. State-owned oil exporter Saudi Aramco has set up a $1.5 billion sustainability fund to invest in breakthrough technologies and start-ups to help fight climate change. The fund, managed by Aramco's venture capital arm, will invest in technologies that support the energy company's net-zero goal of 2050, while helping to develop new low-carbon fuels.
Acwa Power operates in 13 countries in the Middle East, Africa, Central Asia and Southeast Asia. It has a portfolio of 67 assets with a total investment of $66.5 billion and generates about 43 gigawatts of electricity, with 37 percent of its total capacity being renewable. The signing of the new projects comes as Acwa Power continues to promote its renewable energy portfolio around the world. In November, the Riyadh-based utility developer revealed plans to build a 10 gigawatt wind farm in Egypt in partnership with the North African country's New and Renewable Energy Authority and the Egyptian Electricity Transmission Corporation.
The company has also signed deals worth $12 billion to develop new energy projects in Uzbekistan, including the world's largest single onshore wind project in the country's Karakalpakstan region, with a total capacity of 1.5 gigawatts. It was also chosen as the preferred bidder to develop two solar power plants in Indonesia, Southeast Asia's largest economy, as it continues to develop projects in different countries.
Acwa Power aims to reach about 120 gigawatts of generating capacity within The next 10 years and has a presence in 20 countries, its chief Financial officer Abdulhameed Al Muhaidib recently told The National. It plans to raise more money by issuing bonds in late 2022 or early next year to fund its growth plans.