The leading developer, investor, and operator of power generation, desalinated water, and green hydrogen plants, ACWA Power, has signed a power purchase agreement (PPA) with the Saudi Power Procurement Company (SPPC), the principal buyer, to develop the 700MW Ar Rass solar photovoltaic independent power plant (IPP) in Saudi Arabia’s Al Qassim province.
Valued at $450 million (SAR 1.7 billion), Ar Rass is the largest PV project that has been tendered as part of Saudi Arabia’s National Renewable Energy Programme (NREP) to date, for which ACWA Power has been earmarked to deliver 70 percent of the total 58.7 GW target.
The Ar Rass IPP is expected to reach financial close in Q4 2022. Under the terms of the agreement, ACWA Power will sell energy produced by the project to SPPC for a period of 25 years.
When fully functional, the project will produce energy to power around 132,000 homes in central Saudi Arabia.
Ownership of SPPC and ACWA Power’s Ar Rass solar PV project
The agreement was signed in the presence of Prince Abdulaziz bin Salman bin Abdulaziz Al Saud, the Saudi Minister of Energy.
ACWA Power will hold a 40.1 percent stake in the facility, along with 20 percent by the Water and Electricity Holding Company (Badeel), which is a wholly-owned PIF Portfolio Company.
In addition, a 39.9 percent stake will be owned by the State Power Investment Corporation from China.
During the signing ceremony, the Minister of Energy announced that the energy sector aims to launch several renewable energy projects to produce approximately 15,000MW of clean energy between the years 2022 and 2023, with the aim of diversifying the energy mix and achieving its designated targets.
The chairman of ACWA Power, Mohammad Abunayyan, said: “As Saudi Arabia’s leadership ramps up its multi- gigawatt plans for diversifying its energy mix to include renewable energy, solar power is a key component in unlocking positive economic, environmental and social outcomes, whether it is for consumer use, or in mega-projects.
“At ACWA Power, we are proud to be part of this larger story and will work diligently to realising the multiplying effect of solar power, whether it is in job production or emissions mitigation. We thank our partners in the Ministry of Energy for entrusting us with this important project so that we can work in the delivery of our mission in providing responsible, reliable and affordable power.”
In the Kingdom of Saudi Arabia, ACWA Power currently operates Sakaka, a 300MW solar facility, and is also working on constructing Sudair, a 1500 MW independent solar PV project with Saudi Aramco and the Water and Electricity Holding Company (Badeel), a wholly owned PIF Portfolio Company, which is considered the largest of its kind in the Kingdom of Saudi Arabia and one of the largest solar energy projects in the world.
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