Saudi Arabia’s state-owned power procurement company, Principal Buyer, has made impressive advances by signing contracts valued at almost SR31 billion ($8.3 billion). These agreements are with a consortium headed up by ACWA Power. This historic agreement aims to create seven new solar and wind farms around the state. Collectively, these projects will produce enough renewable energy—an astounding 15 gigawatts (GW)—to power more than four million homes. Signing ceremony was attended by Minister of Energy Abdulaziz bin Salman bin Abdulaziz Al Saud and the members of the board of directors of Principal Buyer. Together, these actions represent a historic step forward in the country’s dedication to building a more robust renewable energy portfolio.
The projects include a range of small-scale photovoltaic (PV) solar projects across the different regions in Saudi Arabia. Included among these is the 3GW Bisha project in the Asir region. The 3GW Humaij project will be built in the northwest Madinah region. At the same time, work will progress on the 2GW Khulis project, located in Makkah. The Afif 1 and Afif 2 projects in the Riyadh region have a cumulative capacity of 4GW. This major investment reflects the region’s determination to build a more resilient energy network. These moves certainly underscore Saudi Arabia’s commitment to diversifying its energy portfolio. They reflect the country’s strategic vision for how to achieve cohesive sustainable growth.
Role of Principal Buyer
Principal Buyer holds a significant responsibility in determining the progress of Saudi Arabia’s renewable energy endeavors. The company receives and studies the feasibility of potential projects and manages national tenders for generation projects. It completes power purchase agreements with developer consortia. By overseeing these essential tasks, Principal Buyer ensures that projects align with national energy goals and adhere to high standards of efficiency and sustainability.
In recent years, Saudi Arabia has jumped into the renewable electricity generation game, launching projects that’ll eventually develop a total of 43,213 megawatts (MW). This ambitious undertaking is just one piece of the Kingdom’s overall plan to move off dirtier energy sources. In November 2024, the Saudi Power Procurement Company finalized power purchase agreements with five independent power producer projects. These joint ventures have been expanded through a number of agreements covering both shared thermal and solar photovoltaic energy projects. Combined, they bring a staggering 9.2GW online to the national grid.
Commitment to Climate Action
The legacy of Saudi Arabia’s renewed commitment to renewable energy will depend largely on the country’s direction going forward. These efforts initially seek to make the Kingdom a leader in low-cost electricity production and simultaneously increase investor confidence within its borders. Our serious intent is proven by our agreements with ACWA Power. They fit hand-in-glove with the global initiatives to decarbonize and combat climate change.
The recent agreement represents a serious ramp-up of Saudi Arabia’s investment in renewable energy infrastructure. It is a signifier of the country’s prioritization of economic diversification and innovation within the energy sector. At the same time, the Kingdom is moving full steam ahead with massive solar and wind projects. This strategy emphasizes its role as a leader in renewable energy to the surrounding region.