The Water and Electricity Holding Company (Badeel), a subsidiary of the Saudi Public Investment Fund (PIF), and ACWA Power have signed power purchase agreements to develop the largest solar energy plant in the Middle East. The 2,060MW solar facility will be built in Al Shuaibah, Makkah province, in Saudi Arabia, and is expected to become operational by Q4 of 2025, say the signatories.
Badeel and ACWA Power will each hold a 50% equity stake in the project via the establishment of the Shuaibah Two Electrical Energy Company. The electricity generated by the solar energy plant will be sold to the Saudi Power Procurement Company, and is expected to power around 350,000 homes once operational.
“This marks a key achievement toward PIF’s commitment to develop 70% of Saudi Arabia’s renewable energy by 2030,” said Yazeed A. Al-Humied, head of MENA Investments at PIF, in a statement. “Utilities and renewables is one of PIF’s priority sectors as part of its domestic strategy, which focuses on unlocking the capabilities of promising sectors to enhance Saudi Arabia’s efforts in diversifying revenue sources.”
Badeel and ACWA Power are also developing the 1,500MW Sudair Solar PV project, which was the first cornerstone renewable energy project in PIF’s programme. However, Saudi Arabia has far to go before it fulfils a decarbonised vision. According to GlobalData, Energy Monitor’s parent company, the country will spend $3bn on new oil and gas pipelines in the next few years, 35% of which are already under construction.