A department of the Saudi Arabian Public Investment Fund has signed an agreement with Acwa Power to develop a solar power plant with a total capacity of 2.1 GW in Mecca. The facility will be the largest of its kind in the Middle East. The project will be jointly owned by the hydropower holding company and Acwa Power, and both parties will hold 50% shares through a joint venture.

In a statement issued to Tadawul, the Saudi Stock Exchange, Acwa Power said that the newly established enterprise Shuaiba No.2 Electric Energy Company had signed a power purchase agreement worth 1.75 billion dollars with Saudi Power Procurement Company, and its shares were traded. This marks PIF's commitment to develop 70% of Saudi Arabia's renewable energy by 2030, said Yazeed Al Humied, PIF's Vice President and Head of Middle East and North Africa Investment. Utilities and renewable energy are one of PIF's priority sectors. As part of its domestic strategy, the strategy focuses on unleashing the capacity of promising industries to strengthen Saudi Arabia's efforts to diversify its sources of income.

Saudi Arabia is focusing heavily on renewable energy because it wants to meet its climate commitments while staying away from oil exports. Saudi Aramco, a state-owned oil exporter, has set up a $1.5 billion sustainable development fund to invest in breakthrough technologies and start-ups to help combat climate change. The fund is managed by the venture capital department of Saudi Aramco, which will invest in technologies that support the energy company's 2050 net zero target and help develop new low-carbon fuels.

Acwa Power operates in 13 countries in the Middle East, Africa, Central Asia and Southeast Asia. It has 67 asset portfolios with a total investment of 66.5 billion US dollars, generating about 43 GW of electricity, and 37% of its total capacity is renewable energy. The signing of the new project comes at a time when Acwa Power continues to promote its renewable energy portfolio worldwide. In November, the Riyadh based utility developer revealed that it planned to build a 10 GW wind farm in Egypt in cooperation with the New and Renewable Energy Authority of North African countries and the Egyptian Power Transmission Company.

The company also signed an agreement worth 12 billion dollars to develop new energy projects in Uzbekistan, including the world's largest single onshore wind power project in the Karakalpakstan region of the country, with a total capacity of 1.5 GW. It was also selected as the preferred bidder to develop two solar power plants in Indonesia, the largest economy in Southeast Asia, as it continued to develop projects in different countries.

Acwa Power aims to achieve about 120 GW of power generation capacity in the next 10 years and operate in 20 countries. Its chief financial officer Abdulhameed Al Muhaidib recently told The National. It plans to raise more funds by issuing bonds at the end of 2022 or early next year to fund its growth plan.Editor/XingWentao