Saudi Arabia-based energy company ACWA Power has signed financing agreements with a consortium of investors to develop Al Shuaibah 1 and Al Shuaibah 2 solar projects for a total investment of SAR8.3 billion (~$2.2 billion).

ACWA Power had signed power purchase agreements with the Water and Electricity Holding Company (Badeel) in November last year to develop these solar projects with a 2,060 MW capacity, expected to begin commercial operations by the fourth quarter of 2025.

The total financing package encompasses SAR6.1 billion (~$1.6 billion) in senior debt. The senior debt includes a SAR1.7 billion (~$453 million) Saudi Riyal-denominated loan secured from the National Development Fund on behalf of the National Infrastructure Fund.

A substantial $1.2 billion commercial facility, denominated in U.S. dollars, has been extended by a consortium of prominent local, regional, and international banks, which include Bank Saudi Fransi, First Abu Dhabi Bank, Mizuho Bank, Riyad Bank, Saudi National Bank, Standard Chartered Bank, and Saudi Investment Bank.

The financing structure involves a combination of long-term debt and equity, with ACWA Power, Badeel, and Saudi Aramco forming the core stakeholders. ACWA Power holds a 35% equity stake in the projects, reinforcing its commitment to driving sustainable and innovative energy solutions in Saudi Arabia.

Comprising development, design, permitting, engineering, procurement, construction, commissioning, testing, ownership, operation, and maintenance, both Al Shuaibah 1 and Al Shuaibah 2 projects will significantly contribute to Saudi Arabia’s renewable energy goals.

Badeel and Saudi National Bank are deemed related parties to ACWA Power under the regulatory definition of such relationships.

In May this year, Badeel and ACWA Power announced an investment of SAR12.2 billion (~$3.25 billion) to develop and operate 4.55 GW of solar power projects. The companies signed power purchase agreements with the Saudi Power Procurement Company to develop and operate three new solar power projects in the country.

Earlier this January, Saudi Arabia announced its plans to generate 15.1 TWh of renewable energy annually by 2024, sufficient to meet the power requirements of 692,557 households.