Saudi Arabia’s first wind power project, a $500 million (Dh1.8 billion) scheme, reached a financial close, according to its developers.
The 400 megawatt Dumat Al Jandal wind farm, located 896 kilometres north of Riyadh in the Al Jouf region, is the kingdom’s first utility-scale wind project and was awarded to a consortium led by France’s EDF and Abu Dhabi’s Masdar in January.
The partners won the project with a bid of $21.3 per megawatt hour. Construction is likely to begin soon and commercial start-up is set for the first quarter of 2022, Masdar said.
“The over-subscribed financing of the Dumat Al Jandal project further illustrates the confidence of local and international lenders, and the investment community, in the economy of the kingdom and its potential as a hub for highly cost-effective renewable energy development,” said Masdar chief executive Mohamed Al Ramahi.
Saudi Arabia, the world’s largest oil exporter, is adopting cleaner energy, switching its power stations to run on gas, and plans to incorporate solar and wind capacities to free up its crude for export.
The kingdom could become the region’s biggest wind power market over the next decade, accounting for almost half of the region’s wind capacity additions by 2028, according to Wood Mackenzie. Developers are looking to build 6.2 gigawatts of wind capacity in Saudi Arabia – or 46 per cent of the region’s total wind capacity addition – between 2019 and 2028, the consultancy said in a report in January.
The Dumat Al Jandal project, which will be the region’s largest wind power facility when complete, will supply electricity according to a 20-year power purchase agreement with the Saudi Power Procurement Company, a subsidiary of the state-owned Saudi Electricity Company.
Danish company Vestas will provide the wind turbine technology and also execute engineering, procurement and construction works for the project.
The wind power market in Saudi Arabia is gaining traction, with Italian energy services company Saipem and UAE’s Plambeck signing an agreement last week to explore the possibility of developing an offshore floating wind farm.
The 500MW project will be part of the kingdom’s plan to incorporate 5GW of wind power into its grid, the partners said.