A developer team led by Saudi utility developer Acwa Power has confirmed reaching financial close for the Al-Shuaibah 1 and Al-Shuaibah 2 solar photovoltaic (PV) projects in the kingdom.

According to Acwa Power, the projects will require total investments of $2.37bn, with commercial operations planned to commence by 2025.

This is slightly higher than the value disclosed in a filing on 16 July, which stated that the two schemes would require an investment of SR8.3bn ($2.2bn).

MEED reported on 11 August that the projects had reached financial close.

The projects will be funded by equity and long-term debt.

"The total financing of SR6.1bn ($1.6bn) represents one of the world's largest renewable energy financings," the source said.  

As previously reported, a consortium of mostly local banks agreed to provide SR4.4bn of senior debt. The banks are:  

• Bank Saudi Fransi (local)
• First Abu Dhabi Bank (UAE)
• Mizuho Bank (Japan)
• Riyad Bank (local)
• Saudi National Bank (local)
• Standard Chartered Bank (UK)
• Saudi Investment Bank (local)

The remaining senior debt of SR1.7bn, a Saudi riyal-denominated loan, will come from the National Development Fund on behalf of the National Infrastructure Fund.

The site comprises the development, design, construction, commissioning, testing, operation and maintenance of each project, and each project was closed under a power-purchase agreement as tendered.

The developer team that will deliver and operate the project also includes the Water & Electricity Holding Company (Badeel), which is wholly owned by the Public Investment Fund (PIF); and Saudi Aramco Power Company (Sapco), a wholly owned subsidiary of Aramco.

Acwa Power will hold a 35 per cent equity stake in the projects.

"Negotiated throughout the height of Covid-19, commodity price movements and engineering, procurement and construction (EPC) competition, Al-Shuaibah 1 PV was originally tendered as Al-Faisaliah PV under the National Renewable Energy Programme (NREP) and the site was subsequently expanded to include another larger project, Al-Shuaibah 2," a source close to the project told MEED on 11 August.

Sumitomo Mitsui Banking Corporation provided financial advisory services to the energy ministry/Saudi Power Procurement Company (SPPC) for the projects. UK-based Eversheds Sutherland and the US firm White & Case provided legal advisory services while Germany's Fichtner provided technical advisory services to the client.

Al-Shuaibah 2

The utility developer and Badeel signed the power-purchase agreements with SPPC for the 2,060MW Al-Shuaibah 2 solar power project in December last year.

The developer team awarded the project’s EPC contract to a consortium led by China Energy Engineering Corporation in October last year.

The team, which includes China Energy Construction International Group and Guangdong Electric Power Design Institute, commenced work on the Al-Shuaibah 2 scheme in November.

The new capacity is being procured under the kingdom’s renewable programme price discovery scheme, which the PIF oversees.

The smaller 600MW Al-Shuaibah 1 solar PV project was tendered and awarded as part of the second round of Saudi Arabia's NREP.

Photo: Acwa Power