Saudi Arabia Seeks 30 Solar, Wind Projects in $50Bln Public-Private Partnership Pledge

BE2C2 Report (Updated) — Saudi Arabia will develop 30 solar and wind projects over the next 10 years as part of the kingdom’s $50 billion public-private partnership program to boost power generation and cut oil consumption.

Saudi renewable plans would help reduce the share of the public sector in the economy and leverage project finance opportunities for lenders — both sukuk and non-sukuk, a report by a report issued by Moody’s Investors Service says.

Four generating companies under Saudi Electricity will be privatized, and the kingdom will create a new company to trade power locally and wants to sell electricity to other countries, the Kingdom’s Energy Minister Khalid Al-Falih said Monday at a conference in Riyadh. It also plans to generate electricity from nuclear plants  — two nuclear plants for 2.8 gigawatts are under consideration, reported Bloomberg.

The world’s biggest exporter of crude oil will produce 10 percent of its power from renewables by 2023, the Energy Minister added.

In February 2017, the government opened an auction for 700 megawatts (MW) of renewable energy capacity (solar and wind), a step toward meeting its strategic targets of generating 9.5 gigawatts (GW) by 2023.

Related article: Saudi green energy: 51 local, foreign firms shortlisted for solar, wind projects

Saudi Arabia will offer a tender in the fourth quarter of this year for 400 megawatts of wind power at a project in the northern area of Domat al-Jandal, Falih said.

The projects are part of a plan to transform the Saudi economy by weaning it off oil and creating new industries, localization and employment for Saudis.

51 firms have been shortlisted to bid for solar and wind energy projects. Two projects, a 300 MW solar facility, and a 400 MW wind power will be open for bidding in July.

Related article: 14 Arab states sign MoU to establish joint electricity market, cooperate on renewables

The energy ministry said last week it received 128 applications, from which it chose 27 firms to bid on the sun power project and 24 for the wind farm.

Most of the pre-qualified firms were foreign energy outfits, including EDF Energies Nouvelles, a subsidiary of the French public energy company, along with Marubeni Corp and Mitsui & Co of Japan.

Saudi Arabia plans to develop 9.5 gigawatts of renewables by 2023, requiring investment of up to $50 billion, Al-Falih said in January. The country generated 30 megawatts to 50 megawatts of power from renewables in November, Ziyad Al-Shiha, chief executive officer of Saudi Electricity Co., said at the time.

Saudi Arabian Oil Co., which generates 6 gigawatts of fossil oil-based electricity per year, is interested in participating in the second round of bidding for renewable projects, Abdulaziz Al-Judaimi, senior vice president, said at the conference.

The government plans to privatize the power industry, Al-Falih said. Saudi Electricity will be restructured, with its generation, transmission and distribution businesses all operating independently, he said.

“There are no dates established yet, but the process has been moving and we are working on that,” Saudi Electricity’s Al-Shiha said on the sidelines of the conference.

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BE2C2 is a business unit of Irshad Salim Associates  which produces reports, infographics, analytics and analyses based on available data and related information from sources readily available on the web and in the public domain.

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