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PIF and Acwa Power take on next solar round

16 April 2024

 

Saudi utility developer Acwa Power and sovereign wealth vehicle the Public Investment Fund (PIF) are discussing the fourth round of the renewable energy programme that is being implemented by the PIF.

"We are now looking at the next round," Marco Arcelli, Acwa Power's chief executive, told MEED on the sidelines of the ongoing World Future Energy Summit (WFES) in Abu Dhabi.

He declined to comment on the outage of one of the company's concentrated solar power plants in Morocco, which is expected to result in $47m of lost revenue for the firm.

MEED previously reported that Acwa Power is working to reach financial close on three solar photovoltaic (PV) schemes with a total combined capacity of 4,550MW, as part of Saudi Arabia's National Renewable Energy Programme (NREP).

In February, Acwa Power said the schemes "have satisfied the conditions precedent for senior loans drawdown".

The next round under discussion by Acwa Power and the PIF is understood to have a similar capacity to the third round.

The Riyadh-headquartered utility developer and its partner, Water & Electricity Holding Company (Badeel), signed the power-purchase agreements with Saudi Power Procurement Company to develop and operate the three projects in May 2023.

The three projects, located in the central and northern regions of Saudi Arabia, are:

  • Al Rass 2: 2,000MW
  • Saad 2: 1,125MW
  • Al Kahfah: 1,425MW

The projects are estimated to cost a combined SR12.8bn ($3.4bn).

According to Acwa Power's recent bourse filing, the banks that agreed to provide senior debt financing of SR8.6bn ($2.3bn) for the projects include:

  • Banque Saudi Fransi (local)
  • HSBC (UK)
  • Mizuho Bank (Japan)
  • Riyad Bank (local)
  • Saudi Awwal Bank (local)
  • Saudi National Bank (local)
  • Standard Chartered Bank (UK)

The financing duration is 27.75 years. The project debt financing amount is non-recourse to Acwa Power, which owns a 50.1% equity in the three projects.

Its partner, the PIF subsidiary Badeel, owns the remaining 49.9% equity in the projects.

MEED reported in June 2023 that the developer team expected to have the financing in place for the projects last year.

The three projects take the number of solar PV contracts awarded by the PIF under the kingdom’s NREP to five.

It awarded contracts for the development of the 1,500MW Sudair solar PV in 2021 and the 2,060MW Shuaibah 2 solar PV in 2022.

The PIF is mandated to procure 70% of the NREP’s target capacity through the kingdom's Price Discovery Scheme.

The PIF also owns 44% of Acwa Power.

Based on MEED data, the three projects take the total number of solar PV contracts developed by an Acwa Power-led team in Saudi Arabia to 10. These projects have a total combined capacity of 10GW.

MEED's April 2024 special report on Saudi Arabia includes:

> GVT & ECONOMY: Saudi Arabia seeks diversification amid regional tensions
> BANKING: Saudi lenders gear up for corporate growth
> UPSTREAM: Aramco spending drawdown to jolt oil projects
> DOWNSTREAM: Master Gas System spending stimulates Saudi downstream sector
> POWER: Riyadh to sustain power spending
> WATER: Growth inevitable for the Saudi water sector
> CONSTRUCTION: Saudi gigaprojects propel construction sector
> TRANSPORT: Saudi Arabia’s transport sector offers prospects

 

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Jennifer Aguinaldo

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