Saudi Arabia Invites Bids for 3.7 GW of Solar Projects
The last date to submit bids is December 5, 2023
The Saudi Power Procurement Company (SPCC), a government-owned entity under the Kingdom’s Ministry of Energy, has issued a request for qualification (RFQ) for the fifth round of solar projects with a total capacity of 3,700 MW under the National Renewable Energy Program (NREP).
The last date for bid submission is December 05, 2023.
The projects, distributed across various regions of Saudi Arabia, consist of:
- 2,000 MW Al Sadawi Independent Power Producer (IPP) located in the Eastern province
- 1,000 MW Al Masa’a IPP situated in the Hail province
- 400 MW Al Henakiyah 2 IPP to be located in Madinah province
- 300 MW Rabigh 2 IPP based in the Makkah Province
As of now, essential details related to the bid, such as tender fees, Earnest Money Deposit, and Performance Bank Guarantee, are unspecified.
The project scope includes the development, cost estimation, contracting, and tendering of lump-sum turnkey engineering, procurement and construction arrangements, operation and maintenance agreements throughout the project’s operational term, and financing for solar projects.
Projects must utilize power purchase agreement charge rates, employ cash flow modeling based on the Levelized Cost of Electricity (LCOE), and secure international bank financing outside the home country, with lending based on projected cash flow and debt service coverage ratios.
Bidders must be registered business organizations in good standing under their country’s laws. Consortium formation is required, comprising a qualified Managing Member and a Technical Member.
A Managing Member must demonstrate a minimum total capacity of 500 MW in conventional and/or renewable energy in global IPP projects, serving as a developer or holding a significant share.
Alternatively, they should have executed a minimum of 200 MW in solar IPP projects, reflecting similar development experience in global operations in the last 15 years.
They need a minimum capacity of 100 MW in IPP projects outside their home market (excluding Saudi Arabia) in the last ten years, a tangible net worth of $100 million, and ten years of limited/non-recourse financing experience. They must have a tangible net worth of $100 million and ten years of limited/non-recourse financing experience.
The Managing Member must hold a minimum of 30% initial ownership in the project company and subject to later requirements relaxation.
The Technical Member must have experience operating a 50 MW solar photovoltaic power project and have a minimum tangible net worth of $50 million. If awarded, the Technical Member must hold a 20% share in the project company during the agreement execution, with shareholding requirements relaxed later.
The SPPC will be responsible for the pre-development, tendering, and subsequently offtaking of the energy from these projects.
Aligned with Saudi Arabia’s Vision 2030, these solar projects aim to enhance the country’s energy mix, displacing liquid fuels in the power sector and achieving a 50% renewable energy target.
To date, SPPC has awarded over 12.6 GW of renewable energy capacity under NREP.
Earlier this month, SPPC signed a power purchase agreement for the 400 MW Tabarjal solar photovoltaic project, led by Jinko Power, with an LCOE of $1.70795/kWh, aiming to power around 75,000 residential units annually.
In July, ACWA Power, a Saudi energy company, secured $2.2 billion for the 2,060 MW Al Shuaibah 1 and 2 solar projects with a 35% equity stake, supporting Saudi Arabia’s aim to generate 15.1 TWh of renewable energy annually by 2024.
Saudi Sovereign Fund’s subsidiary Badeel and ACWA Power are investing $3.25 billion to develop 4.55 GW solar projects in the country under NREP.