Saudi Electricity seeks international investors for 2 solar plants

13/06/2016 01:43 AST

Saudi Electricity Co. (SEC) is seeking bids from international developers to build two solar-power plants in Al-Jouf and Rafha in the north of the country. SEC said it is inviting expressions of interest from companies or consortiums around the world in building the two plants.

As much as 50 megawatts of capacity will be developed at each site on land provided by SEC, and the developers will sell the electricity to SEC under long-term agreements. The tender is the first by Saudi Arabia to seek international partners to cooperate in building and operating renewable-energy facilities, according to the Middle East Solar Industry Association.

One Gulf power industry executive estimated that each plant might cost between $100 million and $120 million to build.

HSBC Holdings Plc’s Saudi unit is acting as financial consultant for the tender, DLA Piper is legal adviser, and DNV GL is technical consultant, Saudi Electricity said. National Transformation Program 2020 announced last week focused on introducing public-private partnerships in which private companies would provide much of the financing for projects and then operate them to earn profits.

In April, Saudi Arabia said it planned to generate 9.5 gigawatts of electricity from renewable energy by 2030 which would help to conserve its oil production for export rather than use in power generation.

Saudi Arabia is developing renewable energy to take advantage of its ample sunlight and to diversify energy supply amid rising demand. Yet renewable resources will only account for about 10 percent of total power capacity compared with the previous target of about 50 percent, Energy, Industry and Mineral Resources Minister Khalid Al-Falih said during a recent presentation of the Kingdom’s long-term strategy to overhaul the economy.

The government is now counting on increased output of natural gas to help cut its reliance on crude oil.

Arab News