ESG

SAUDI ON COURSE TO NET ZERO WITH NEW PROJECTS

The Saudi Power Procurement Company (SPPC) has released in November a request for qualification (RFQ) for the fifth round of solar projects under the National Renewable Energy Program (NREP), which is led and supervised by the Ministry of Energy.

The Round 5 projects is expected to have a combined capacity of approximately 3,700 megawatts (MW), comprising: Al Sadawi IPP in the Eastern province (2,000 MW), Al Masa’a IPP in the Hail province (1,000 MW), Al Henakiyah 2 IPP in Madinah province (400 MW), and Rabigh 2 IPP in the Makkah province (300 MW).

These projects are part of the NREP, which aims to achieve an optimal energy mix that will displace liquid fuels in the kingdom’s power sector, and supply 50% of its electricity through renewable energy sources by 2030.

SPPC is responsible for the predevelopment, tendering, and subsequently o-taking of the energy from the projects. To date, the company has awarded over 12.6 gigawatts (GW) of renewable energy capacity under the NREP.

Separately, SPCC signed a power purchase agreement (PPA) for the 1,100 MW Al Henakiyah Solar PV project as part of NREP’s Round 4. The PPA was won by a consortium consisting of Abu Dhabi Future Energy Company PJSC (Masdar), EDF Renouvelables, and Nesma Company Ltd. The project will contribute to supplying power to around 190,000 residential units annually. The levelised cost of electricity (LCOE) for Al Henakiyah Solar PV project is highly competitive, set at 1.68420 USDc/kWh (USD coin per kilowatt-hour) or 6.31575 halalas/kWh.

Another PPA was signed for the 400 MW Tabarjal Solar PV project as part of NREP’s Round 4. The consortium is led by Jinko Power (HK) Company Limited, Sun Glare Holding Co., and Sunlight Energy Holding Co. This project, which will contribute to supplying power to around 75,000 residential units annually, achieved a competitive LCOE of 1.70795 USDc/kWh or 6.40482 halalas/kWh.

    

The recently concluded Saudi-African summit in Riyadh focused heavily on sustainable development and environmental investments. The kingdom signed more than 50 agreements and memoranda of understanding in various sectors including tourism, investment, finance, energy, renewable energy, mining, transportation, logistic services, agriculture, water, communications, and information technology.

Summit participants also boosted Saudi-African partnerships in energy, mining, agriculture, and food security, while also agreeing to collaborate in financing sustainable development projects, supporting small and medium enterprises (SMEs), developing the manufacturing industries, enhancing environmental trade, and organising periodic business meetings between exporters and importers on both sides.

The projects will account for more than USD 25 billion over the next few years. The Saudi Development Fund will finance development projects on the African continent until 2030, at a cost of about USD 5 billion. Equally important, exports from the kingdom to Africa will also be financed and provided until 2030, at an investment of about USD 10 billion.

 

SUSTAINABLE INVESTMENT

Saudi corporations are also beefing up their environmental, social and governance practices with sustainable investment. One of which is NEOM, the sustainable regional development in the country’s northwest region. The company is investing USD 100 million, through the NEOM Investment Fund (NIF), in Pony.ai, a leading global autonomous driving company. A joint venture will be established for autonomous technology solutions for the region.

Through the joint venture, NEOM and Pony.ai will develop, manufacture, and deliver autonomous driving services, advanced vehicles, and smart vehicle infrastructure in NEOM and key markets in the Middle East and North Africa (MENA). Pony.ai is the first to operate fully driverless vehicles in both Beijing and Guangzhou, and is among the first in China to obtain licenses to operate fully driverless vehicles in all four Tier-1 cities in China (Beijing, Guangzhou, Shanghai and Shenzhen).

"This investment aligns with the ambitious plans announced by NEOM to achieve autonomous transportation solutions for the region. Pony.ai’s autonomous driving technology is already available today and we are excited to be able to utilise it in NEOM in the near future,” NIF CEO Majid Mufti said.

The joint venture will include a state-of-the-art autonomous vehicle manufacturing, and research and development (R&D) facility in NEOM.