Saudi companies, including ACWA Power and Aramco Power, signed $8.3 billion in power purchase agreements for 15 gigawatts (GW) of renewable energy projects under the National Renewable Energy Program (NREP). The deals, led by ACWA Power with Badeel and Aramco Power, include five solar plants (12,000 MW) in Aseer, Medina, Mecca, and Riyadh, and two wind projects (3,000 MW) in Riyadh. Supporting Saudi Arabia’s 130 GW renewable target by 2030, can this $8.3 billion investment drive $50 billion in clean energy markets or will $100 million in financing and grid challenges limit impact?

Project Scope and Technology

ACWA Power, with a 35.1 percent stake, leads the consortium with Badeel (34.9 percent) and Aramco Power (30 percent), developing seven projects: Bisha (3,000 MW solar, 1.29 cents/kWh), Humaij (3,000 MW solar, 1.31 cents/kWh), Khulis (2,000 MW solar, 1.36 cents/kWh), Afif 1 and 2 (2,000 MW each, solar, 1.26-1.27 cents/kWh), Starah (2,000 MW wind, 7.71 halalas/kWh), and Shaqra (1,000 MW wind, 6.99 halalas/kWh). Financial closes are set for Q3 2025, with operations starting in 2027-2028. The projects align with Saudi Arabia’s Vision 2030, aiming for 50 percent renewable electricity by 2030.

Read more: SAEL’s $954M Solar Manufacturing Investment in Uttar Pradesh

Economic and Environmental Impact

The 15 GW projects will power 2.3 million homes, create 4500 jobs, and cut 28 million tonnes of CO2 annually, contributing 0.08 percent to global 35.6 billion tonne CO2 equivalent reductions. The $8.3 billion investment, part of SPPC’s 43,213 MW renewable portfolio (10,213 MW grid-connected), boosts Saudi Arabia’s $107.5 billion clean energy sector. Competitive levelized costs (1.26-7.71 halalas/kWh) attract $10 billion in foreign investment, supporting economic diversification. ACWA Power’s $1.9 billion rights issue funds equity contributions, with 75-85 percent for project financing.

Corporate Governance and Transparency

Transparent governance ensures project viability. ESG reporting aligns 80 percent of the $8.3 billion with Paris Agreement goals, avoiding 50 million dollars in misallocation risks. Partnerships with 20 banks, including HSBC and Mizuho, verify financing, saving 10 million dollars in audits. Public-private coordination via PIF’s Badeel ensures 70 percent of projects meet NREP standards, supporting 1 trillion dollars in global renewable markets per Seville Commitment goals. The Saudi Energy Ministry’s oversight minimizes 5 million dollars in regulatory delays.

Explore OneStop ESG Marketplace: Renewable Energy

Challenges to Scaling

Grid integration risks 100 million dollars in delays, with only 40 percent of Saudi Arabia’s grid ready for 15 GW by 2027. Financing challenges, including US tariff threats, could disrupt $500 million in loans. High wind project costs (6.99-7.71 halalas/kWh) strain 20 percent of budgets compared to solar’s 1.26-1.36 cents/kWh. Scaling to 130 GW needs 50 billion dollars, with 200 million dollars in grid upgrades. Policy shifts, like potential Paris Agreement exits, risk 1 billion dollars in funding.

Future Outlook

By 2030, Saudi Arabia’s grid could reach 20,013 MW of renewables, with these projects contributing 15 GW. ACWA Power’s portfolio may hit 50 GW, driving $30 billion in revenue. Partnerships with 50 global firms could save 100 million dollars in costs, supporting 0.1 percent of CO2 equivalent reductions. Scaling needs 500 million dollars to align $50 billion in markets.

Explore ESG Solutions on our marketplace - OneStop ESG Marketplace.

Keep abreast of the top ESG Events on OneStop ESG Events.

OneStop ESG Educate: Your go-to source for top ESG courses and training programs tailored to your needs.