Saudi Arabia to generate renewable energy investments worth $3.7bn

GlobalData Energy 17 December 2019 (Last Updated December 18th, 2019 11:16)

Saudi Arabia’s Finance Ministry has said the government expects to generate investments worth SR14bn ($3.7bn) in the second and third rounds of the National Renewable Energy Programme.

Saudi Arabia to generate renewable energy investments worth $3.7bn

Saudi Arabia’s Renewable Energy Project Development Office expects to receive bids for round two of the kingdom’s renewable energy programme soon

Saudi Arabia’s Finance Ministry has said the government expects to generate investments worth SR14bn ($3.7bn) in the second and third rounds of the National Renewable Energy Programme, which is being overseen by the Renewable Energy Project Development Office (Repdo).

Investments in renewable and alternative energy will amount to SR14bn and create 6,800 job opportunities in the construction phase and 730 jobs in the operation and maintenance phase, the ministry said in its 2020 budget statement.

There are six photovoltaic (PV) solar independent power projects (IPP), with a combined total capacity of 1,270MW, under round two of the NREP, while round three comprises one wind and five solar PV projects with a combined total capacity of 1,580MW.

NREP rounds two and three schemes


Round two

Repdo prequalified 60 firms to participate in the second NREP tendering round. The 60 prequalified firms include managing partners, technical members and local managing members for category A projects; and managing and technical members for larger category B projects. The full list of prequalified companies can be accessed on the Repdo website here.

While all of the six projects will be procured along broadly similar lines, they have been split into two groups for financing requirements. For category A projects – which include the Medina and Rafha schemes – the IPPs will be financed through “corporate finance procured on the balance sheets of the successful bidders’ consortium members and/or through the raising of limited or non-recourse debt facilities”.

The tender closing date for category A projects is 20 January.

For the four category B schemes, the IPPs will be financed through the raising of limited or non-recourse debt facilities. The tender closing date is 6 January.

Each project will be developed under a build, own and operate model, with the winning bidder for each project to sign a 25-year power-purchase agreement with the kingdom’s offtaker.

The successful bidding group will form a special purpose vehicle to operate each plant and will own 100 per cent of the asset.

Repdo’s second-round advisers are Japan’s Sumitomo Mitsui Banking Corporation (SMBC) as lead and financial adviser, the UK’s DLA Piper as legal adviser and Germany’s Fichtner as a technical adviser.

Round three

Repdo is also expected to issue tender documents for one wind and five PV solar IPP projects, which make up the third round of NREP, shortly after it receives bids for the round two projects. These schemes have a total combined capacity of 1,580MW.

In January this year, Riyadh ramped up its clean energy targets to 27.3GW by 2024 and 58.7GW by 2030, superseding the previous 9.5GW by 2023 target.

Repdo will oversee the development of 30 per cent of this ambitious target through competitive tendering. The Public Investment Fund (PIF) is expected to appoint developers through direct negotiations for the remaining 70 per cent.

Round one

Following a competitive bidding process, Repdo has already awarded two contracts under the NREP’s first round, which includes the 300MW Sakaka PV solar project and the 400MW Dumat al-Jandal wind power project.

Earlier this month, local utility developer Acwa Power confirmed it has connected the 300MW Sakaka PV solar plant to the national electricity grid.

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