Saudi Aramco has joined a consortium working to build a solar power plant in the kingdom at a cost of about $1 billion, as Riyadh seeks to expand its renewable energy supply.
Aramco, represented by its subsidiary SAPCO, will own 30% of the project, named Sudair First Renewable Energy Company.
The Saudi company, ACWA, which leads the coalition, and Badel Water and Electricity Holding Company will own 35% of each.
ACWA Power, in which the Saudi sovereign fund owns half of its shares, announced in a statement today, Sunday, that it has completed the financial closure of the Sadir solar energy project, which has a production capacity of 1,500 megawatts within the program of the Public Investment Fund for Renewable Energy.
The investment value of the project is 3.4 billion riyals ($910 million), and the Sudair plant is set to become one of the largest solar power plants in the world to be implemented by a single contractor, in addition to being the largest of its kind in the Kingdom.
The project relies on a financing system with a limited right of recourse, where the main loan is structured as soft micro-debt with a repayment period of 28 years, and with conventional and Islamic financing.
The project's financing structure also includes a set of interim facilities that depend on equity, provided by local and international banks to support the group's investment in the project's equity.
An agreement was signed to sell the energy that the project will produce with the Saudi Energy Purchase Company for a period of 25 years, and the Sudair Solar Energy Project recorded a tariff price for producing electricity from solar energy, which is among the lowest in the world.
Aramco is looking to spend on renewable energy projects along with the Public Investment Fund.
Aramco CEO Amin Nasser said last week that the company is considering hydrogen production and export even as it invests to expand oil production capacity and sales.
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