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Saudi Arabia has entered into joint ventures with two Chinese solar firms to build solar plants in the country worth some $3 billion, highlighting the oil-rich kingdom’s campaign to boost renewable power production.
In the first JV, publicly-traded, China-based JinkoSolar (NYSE:JKS) has announced that it will form a joint venture with Saudi Arabia’s sovereign wealth fund and a privately owned Saudi renewable firm to build a solar cell and module manufacturing facility for a total investment of about $1 billion. The project will be financed through a combination of internal and external financing. Renewable Energy Localization Company, a unit of the Public Investment Fund (PIF) of Saudi Arabia and Vision Industries would hold 40% and 20% equity interests in the JV, respectively, while JinkoSolar’s Middle East unit would hold the rest of the equity interest. According to JinkoSolar, the facility is expected to hit an annual production capacity of 10 gigawatts for high-efficiency solar cells and solar modules.
In another JV, the Saudi sovereign wealth fund Public will partner with TCL Zhonghuan Renewable Energy Technology Co., the world’s second-largest maker of solar wafers, and Vision Industries Co. on a $2.08 billion plant.
Three years ago, Saudi Arabia’s Crown Prince Mohammed bin Salman unveiled Saudi Vision 2030, the Kingdom’s ambitious roadmap for economic diversification, global engagement, and enhanced quality of life. In the economic plan, Saudi Arabia has set a target to develop ~60 GW of renewable energy capacity by 2030, multiples higher than the country’s current installed capacity of only 2.8 GW and comparable to ~80 GW of power plants burning gas or oil. With its steady Red Sea breezes and sun-scorched expanses, Saudi Arabia really is prime real estate for renewable energy generation. Meanwhile, Saudi Aramco has announced plans to spend $110 billion over the next couple of years to develop the Jafurah gas field, estimated to hold 200 trillion cubic feet of gas. The gas will then be converted into a much cleaner fuel: Blue hydrogen.
The Saudi government is also building a $5 billion green hydrogen plant that will power the planned megacity of Neom. Dubbed Helios Green Fuels, the hydrogen plant will use solar and wind energy to generate 4GW of clean energy that will be used to generate green hydrogen.
