Saudi Arabia-based ACWA Power and AlGihaz have reached financial closure of SAR1.2bn ($320m) for the 300MW Sakaka solar plant to be located in Saudi Arabia.
ACWA Power stated that this project is the first utility scale renewable energy project to be developed in the country under the landmark National Renewable Energy Program executed by REPDO (Renewable Energy Project Development Office).
The two companies have formed a new company Sakaka Solar Energy Company (SSEC), in which ACWA will hold 70% stake and AlGihaz will own 30%, to own the solar plant. The new company has signed a 25 year power purchase agreement with Saudi Power Procurement Company (SPPC) acting as offtaker.
The transaction was financed through limited recourse ring fenced project financing with the entire debt fully underwritten by Natixis as initial mandated lead arranger and bookrunner.
Commercial operation of the solar plant is expected to begin by the end of next year. After completion, the plant is expected to generate nearly 300MW of clean electricity, which is enough to supplied to more than 75,000 households, while avoiding more than 430,000 tonnes of carbon emissions into the atmosphere every year.
AlGihaz vice chairman and CEO Sami Al Angari said: “We are delighted to be investing with ACWA Power on this important and landmark project in Saudi Arabia and are honoured to provide our support to the consortium for the delivery of the project.
“The Kingdom’s plan to become more diversified in its energy sources and concentrate on renewable energy is an important part of the National Transformation Plan (NTP) and we are keen to play a major role in helping deliver this.
“AlGihaz is committed to a green future for the Kingdom and for the world and we will aim to participate to any renewable energy project that would help achieve this goal.”
The project’s engineering, procurement and construction (EPC) contract has been awarded to consortium of Mahindra Susten and Chint. The operations and maintenance contract has been given to Diaa Sakaka Operation and Maintenance Company, an affiliate of First National Operations & Maintenance (NOMAC).