Saudi Arabia seeks investors for solar plants

• 7 years ago (2016-06-14)
• David Flin

Middle East 310 North America 998 Renewables 751

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Saudi Arabia is seeking international investors to build two solar power plants, using a deal structure that could become a model for the country’s infrastructure projects as low oil prices pressure the government’s finances.

The state-owned utility Saudi Electricity Company (SEC) said that it was inviting expressions of interest from companies or consortia around the world in building two solar plants at Al Jouf and Rafha in the north of the country. As much as 50 MW will be developed at each site on land provided by SEC, and the developers will sell the electricity to SEC under long-term agreements. One Gulf power industry executive estimated that each plant might cost between $100-120 million to build.

Saudi Arabia used to build the vast majority of its infrastructure projects with state money, but that is changing as low oil prices saddle the Government with a huge budget deficit, forcing it to find other sources of finance. A broad economic reform plan has been announced that focuses on introducing public-private partnerships for the financing of major infrastructure projects. In April, Saudi Arabia said that it plans to generate 9.5 GW from renewable energy 2030, to help conserve its oil production for export rather than use in power generation.