Saudi’s ACWA Power, fueled by Crown Prince Muhammad bin Salman’s ambitious vision, is racing towards a renewable future, aiming to provide half of the nation’s electricity from wind and solar by 2030.
With a staggering $50 billion valuation and a 50% ownership stake by the Public Investment Fund (The PIF), ACWA Power is a game changer with 24 green projects globally, targeting 54 gigawatts of capacity by 2030.
With projects in NEOM, The Red Sea and plans to build the largest Solar Energy Plant in the Middle East in the Makkah Province, ACWA Power is leading the way in Renewable Energy Solutions.
The Rise of ACWA Power
A silent revolution is underway in the heart of the Arabian Peninsula. A country known for its vast oil reserves is swiftly transitioning towards a greener, sustainable future.
Saudi Arabia, home to one-fifth of the world’s oil reserves, is making significant strides in renewable energy, led by the ambitious ACWA Power.
Formed in 2004 in Riyadh, ACWA Power has evolved over the past 19 years from a small-scale utility to a significant player in the global energy market. A four-fold increase in market value has marked its rapid ascent since it went public with an IPO in 2021, with its current worth standing at an impressive $50bn.
The Public Investment Fund (PIF) holds a substantial 50% stake in the company. PIF increased its stake in ACWA Power from 33.36%, which comes as part of PIF’s strategy to support the development of the renewable energy sector within Saudi Arabia and to support the growth of national champions
The company is currently spearheading a slew of green projects both locally and abroad. With 24GW of renewable energy projects either operational or in advanced stages, ACWA Power’s green energy footprint is significant.
The company’s original business of desalinating water has grown from 1m cubic meters a day in 2006 to 7.6m cubic meters in December.
A Look Towards The Future
The company has set ambitious goals under CEO Marco Arcelli, a seasoned Italian energy executive. Arcelli envisions the assets in which ACWA Power has a stake to triple by 2030, reaching a staggering $250bn.
The company aims to fuel Saudi Arabia’s green energy supply chain and contribute significantly to the country’s renewable energy goals.
A Unique Advantage
ACWA Power’s success story is further fueled by its unique financial advantage. Unlike many renewable operators worldwide grappling with rising project costs due to increasing interest rates, ACWA Power has access to non-interest-bearing loans from the PIF.
This financial leverage, coupled with debt secured against individual projects and loans from banks, has allowed the company to expand capacity and lower customer costs.
A Global Perspective
Despite the low returns on domestic projects compared to global standards, ACWA Power has its sights set on international ventures.
The company invests in nearby regions such as Bahrain, Egypt, Jordan, Oman, Turkey, and the United Arab Emirates and farther afield in Azerbaijan, Morocco, South Africa, and Uzbekistan.
NEOM Green Hydrogen Project
ACWA Power does not just focus on traditional renewable energy sources like solar and wind. The company also has its sights set on green hydrogen.
The NEOM Green Hydrogen Project, an equal joint venture between NEOM, Air Products, and ACWA Power, is set to be the world’s largest utility-scale, commercially-based hydrogen facility powered entirely by renewable energy.
Upon its commencement in 2026, the facility aims to generate 600 metric tonnes of clean hydrogen daily through electrolysis employing thyssenkrupp technology, which produces nitrogen by air separation using Air Products technology.
NEOM Green Hydrogen Co. has recently received its first major shipment of 250 wind turbines for the world’s largest green hydrogen plant in the NEOM megacity. It will be assembled at the Wind Garden site, supporting NGHC’s goal to export green hydrogen starting in 2026.
Additionally, it will produce nitrogen through air separation utilizing Air Products technology and manufacture up to 1.2 million tonnes of green ammonia annually.
The initiative is projected to mitigate the environmental impact upon successful implementation, mitigating approximately 5 million metric tonnes of carbon emissions annually.
Collaboration with Red Sea Global
In line with Saudi Arabia’s Vision 2030, ACWA Power is contributing to sustainable tourism. The company has partnered with Red Sea Global (RSG) to power The Red Sea Project, the world’s largest tourism destination powered solely by renewable energy.
The site is situated along the Red Sea coast in Saudi Arabia, between Umluj and Al Wajh. The project is set to be executed under the “Build, Own, Operate, Transfer” framework. ACWA Power will assume the primary role in the project’s construction, engineering, operations, and maintenance.
The facilities will generate power from renewable sources, treat water, manage wastewater, offer district cooling services, and handle municipal solid waste without resorting to landfills on the premises.
ACWA Power partnered with Red Sea Global to create over 20 acres of new wetlands per Saudi Arabia’s climate action plans. This groundbreaking initiative was announced at the Saudi Green Initiative Forum, marking a significant stride toward achieving the goals of the Oil Sustainability Program.
The two companies signed a 25-year Utilities Concession Agreement, valued at $1.5 billion, to develop a multi-utilities project.
The project involves constructing, engineering, operating, and maintaining plants delivering power from renewable sources, water treatment, wastewater processing, district cooling, and handling municipal solid waste.
Continuous Renewable Energy
One of the unique aspects of The Red Sea Project is its commitment to providing renewable energy 24/7. This is made possible by the world’s largest battery storage facility of 1000 MWh, allowing the destination to remain powered by renewables day and night.
This initiative is expected to save at least half a million tons of CO2 yearly – equivalent to emissions from around 99,000 cars or 78,000 homes. This partnership will likely create a self-sustaining, 100 percent renewable tourism destination.
Challenges and Opportunities
While the company’s growth trajectory seems promising, it is challenging. ACWA Power must add 6-7GW of capacity equivalent to three or four large projects yearly for the rest of the decade to meet Prince Muhammad’s domestic goals.
This rapid expansion will require a significant cost management and debt acquisition focus.
The PIF Landmark Solar PV Project
In a significant milestone in the renewable energy sector, Badeel, the Water and Electricity Holding Company owned by the PIF, and ACWA Power have joined forces to establish a 2,060 MW solar photovoltaic (PV) plant in Al Shuaibah, Makkah province.
This groundbreaking initiative is the largest of its kind in the Middle East and is projected to be operational by Q4 2025. Once completed, it is due to supply power to 350,000 homes, marking a significant stride towards a sustainable future.
Badeel and ACWA Power will co-own this monumental project, each holding a 50% equity stake. A joint company named “Shuaibah Two Electrical Energy Company” has been established to facilitate the project’s development.
This project is a testament to Saudi Arabia’s commitment to diversifying its energy sources and paving the way for a sustainable future. The project underscores the country’s commitment to renewable energy
Building a Greener Future
ACWA Power’s portfolio demonstrates a solid commitment to a sustainable and regenerative future. The company’s innovative approaches to technology, finance, and pricing have established it as a global leader in renewable energy.
With a track record of success and ambitious plans for the future, ACWA Power will likely play a pivotal role in Saudi Arabia’s transition to a green economy, both locally and globally.