A major consortium led by Saudi Arabia’s ACWA Power is set to invest $8.3 billion in developing renewable energy projects in the kingdom. This initiative will focus on building 15 gigawatts of solar and wind farms, marking a significant move toward greener energy.
ACWA Power, which is backed by Saudi Arabia’s sovereign wealth fund, has joined forces with Aramco Power, a branch of Saudi Aramco. Together, they have signed agreements to establish five solar and two wind projects across four regions of the country.
This investment is part of Saudi Arabia’s broader goal to derive half of its electricity from renewable sources by 2030. Crown Prince Mohammed bin Salman is driving this vision as the country seeks to shift its economy away from oil dependence and achieve net-zero carbon emissions by 2060.
As of 2024, Saudi Arabia has around 4.34 gigawatts of solar power capacity, but the kingdom aims to boost this to up to 130 gigawatts by the end of the decade. In simple terms, one gigawatt can power about one million homes. Currently, most of Saudi Arabia’s energy comes from oil and gas.
The Saudi government has touted these agreements as some of the largest globally, boasting the lowest prices in the market, thanks to efficient financing and a strong investment climate.
During the signing ceremony in Riyadh, Energy Minister Prince Abdulaziz, a half-brother of Crown Prince Mohammed, emphasized the significance of these deals. The consortium also includes the Water and Electricity Holding Company, which is linked to the Public Investment Fund.
The Middle East is experiencing rapid growth in solar energy, thanks to its abundant sunlight and decreasing costs of solar technology. Gulf nations are eager to redirect their oil and gas resources toward export markets.
The region is now the fastest-growing outside of China regarding renewable energy capacity additions, showing promising potential for future growth.
In the central Riyadh area, two solar and two wind projects will be established, with additional solar developments planned for the Mecca, Medina, and Aseer regions. The projects are expected to be operational by 2028.
ACWA Power is recognized as one of the largest renewable energy companies in the Middle East, operating in 14 countries across various regions, including Africa and Asia. The company has recently made moves to enter the Chinese market, seeing it as a significant opportunity for growth despite ongoing trade tensions with the U.S.
According to ACWA Power’s CEO Marco Arcelli, the decision to enter China is a strategic one, given its size as the world’s leading market for renewable energy.