SEC closes $3bn financing for 3.6GW capacity power stations

Saudi Arabia’s power generation is poised for a substantial boost following the successful closing of financing for two electricity projects, with a combined capacity of 3.6 gigawatts.

The deals involving the Taiba 1 and Qassim 1 independent power producer projects, with a combined financing value of SR11.4 billion ($3.04 billion), signify a major milestone in Saudi Arabia’s energy landscape, the Saudi Press Agency reported.

The two IPP projects, featuring combined cycle gas turbine technology, were awarded to the Saudi Electricity Co. by the Saudi Power Procurement Co. as part of an alliance with ACWA Power in October 2023.

Additionally, in November 2023, a 25-year power purchase agreement was signed with the SPPC for both projects, which are being developed on a build-own-operate basis.

Khalid Al-Qunun, CEO of SEC, commended the efforts of the company’s team in driving transformation in the electric energy sector in the Kingdom, the SPA report added.

He said: “These projects embody our ongoing ambitions to expand energy generation projects and adopt the latest technologies to ensure the provision of environmentally friendly energy solutions that contribute to achieving the company’s zero neutrality target by 2050, in line with the Kingdom’s ambitious aspirations in the field of energy sustainability.”

The financing agreements were signed by the two project companies: Sidra One for Electricity for the Taiba 1 station and Qudra Energy for the Qassim 1 station. The SEC holds a 40 percent share in both companies.

These modern stations represent a notable advancement in electric energy production in the Kingdom. They signify an important step toward a sustainable future by utilizing the latest energy production technologies, such as combined cycle gas turbines known for their high efficiency.

According to the SPA report, relying on these advanced technologies contributes to improving generation efficiency, reducing emissions, and reducing reliance on liquid fuels in the electricity production sector in the Kingdom.

These stations mark the beginning of a series of CCGT stations that will expedite the realization of Saudi Vision 2030 goals, including achieving an optimal energy mix and increasing local content.

This also sets the stage for achieving the goals of the Saudi Green Initiative, aiming for carbon neutrality by 2060. The engineering design of these stations allows for the future integration of carbon capture facilities, underscoring the SEC’s commitment to environmental, social, and governance responsibility, the SPA report added.