China Energy Engineering Inks $972M Saudi Solar Plant Deal

China Energy Engineering Corp Ltd has secured a significant contract to construct a solar power facility in Saudi Arabia, as announced in a filing with the Shanghai Stock Exchange on August 13, 2023. The agreement, valued at 6.98 billion yuan ($972 million), marks another milestone in the growing renewable energy collaboration between China and Saudi Arabia.

The 2 gigawatt (GW) photovoltaic plant will be a joint venture involving a consortium led by China Energy Engineering and several Saudi partners. These include the kingdom's sovereign wealth fund, the Public Investment Fund (PIF), ACWA Power, and Saudi Aramco Power Company.

According to the filing, the construction of this massive solar facility is expected to span 31 months. This project aligns with Saudi Arabia's ambitious goal to generate 50% of its electricity from renewable sources by 2030, as part of the kingdom's Vision 2030 plan to diversify its economy and reduce dependence on oil.

The agreement is the latest in a series of renewable energy partnerships between Chinese and Saudi entities. In July 2023, TCL Zhonghuan Renewable Energy Technology, a major Chinese manufacturer of silicon wafers for solar panels, entered into a $2.08 billion joint venture with Saudi partners, including the PIF, to establish a silicon crystal and wafer manufacturing project in the kingdom.

Additionally, JinkoSolar, one of the world's largest solar panel manufacturers, recently signed an agreement to invest $985 million in a 10 GW solar cell and module manufacturing plant in Saudi Arabia. These developments underscore the kingdom's commitment to harnessing its abundant solar resources, given its high solar irradiance and climate characterized by extremely hot summers and mild winters.

China's involvement in these projects is not surprising, as it is currently the world's largest producer of solar panels. The collaboration between Chinese expertise and Saudi Arabia's renewable energy ambitions is likely to accelerate the kingdom's transition towards a more sustainable energy mix.

As these projects unfold, they are expected to contribute significantly to Saudi Arabia's renewable energy capacity, creating jobs and fostering technological transfer in the process. The partnership between China and Saudi Arabia in the renewable energy sector appears to be gaining momentum, potentially reshaping the energy landscape of the Middle East.