Gulf Construction Online - $906m Sudair solar plant achieves financial close

Saudi Focus

The Sudair project is expected to be one of the largest single-contracted solar PV plants in the world.

$906m Sudair solar plant achieves financial close

01 September 2021

Acwa Power, a leading developer, investor and operator of power generation and desalinated water plants, has announced the financial close for the 1,500 MW Sudair solar plant, a key project under the Public Investment Fund (PIF) renewable energy programme.

The launch of the Sudair Solar project was announced at the inauguration of Sakaka photovoltaic (PV) project in April 2021, under the patronage of HRH Prince Mohammed bin Salman bin Abdulaziz, Crown Prince, Deputy Prime Minister and Chairman of the Supreme Committee for Energy Mix Affairs for Electricity Production and Enabling Renewable Energy Sector, and in the presence of Prince Abdulaziz bin Salman bin Abdulaziz Al Saud, Minister of Energy.

A specialised Saudi technical team at the Ministry of Energy selected the Sudair project site and carried out the engineering requirements and preliminary studies of the project with the aim of achieving the highest levels of efficient energy production and contributing to shaping the circular carbon economy, which the kingdom adopted during its presidency of the G20 last year.

With an investment value of SR3.4 billion ($906.54 million), Sudair Solar PV project, located at Sudair Industrial City, is set to become one of the largest single-contracted solar PV plants in the world and the largest of its kind in Saudi Arabia. A 25-year power purchase agreement for the plant was signed with the Saudi Power Procurement Company, with the tariff being among the lowest for solar PV projects globally. Using bi-facial modules with tracking technology, the plant is set to deliver highly efficient performance and be capable of powering 185,000 homes, while offsetting nearly 2.9 million tons of emissions per year.

Sapco, a fully owned company of Aramco, has joined the consortium led by Acwa Power and including Badeel – a company fully owned by PIF. The Sudair Solar PV project is the first project under PIF’s renewable energy programme, which aims to support Saudi Arabia’s ongoing energy transition and diversification, and to deliver 70 per cent of the country’s renewable energy under the National Renewable Energy Program (NREP).

Acwa Power – in which PIF holds a 50 per cent stake – and Badeel will each own 35 per cent in the special purpose vehicle “Sudair One Renewable Energy Company”, which was incorporated for the project; with Sapco holding a 30 per cent stake.

Aramco’s investment in the Sudair Project is its first participation with PIF in its renewable energy programme, reflecting the company’s efforts to advancing sustainable energy solutions within its operations and Saudi Arabia, where a variety of low-carbon energy solutions are being deployed.

The financing for the project is based on the principles of limited recourse project financing, with the senior debt structured as a soft mini perm facility with a tenor of 28 years and both conventional as well as Islamic tranches. The financing structure also features a set of equity bridge facilities provided by local and international banks supporting the sponsor group’s equity investment in the project.

The financing group includes Mizuho Bank, Riyad Bank, Korea Development Bank, Arab Petroleum Investments Corporation (Apicorp), Al Rajhi Banking & Investment Corporation, and Standard Chartered Bank as senior lenders and mandated lead arrangers. The equity bridge facilities are provided by Bank Al Bilad, Saudi British Bank and SMBC International.