Local utilities developer Acwa Power has confirmed it has been awarded the contract to develop Saudi Arabia’s first major renewable energy project.

The developer has been awarded a 25-year power purchase agreement (PPA) contract to develop a 300MW photovoltaic (PV) solar plant for a world record tariff of $c2.34/kilowatt hour (kWh). MEED reported on 5 February that the client, the Renewable Energy Project Development Office (Repdo), had selected the developer and was due to sign the contract imminently. The 300MW Sakaka solar plant will require a total investment of about $302m.

The client had shortlisted the Saudi developer along with a consortium led by Japan’s Marubeni earlier in January for the planned 300MW Sakaka photovoltaic (PV) solar plant.

Acwa Power had submitted the second lowest bid of 2.3417$c/KWh during the competitive biddign submission in October last year. Japan’s Marubeni had submitted the third lowest bid of 2.6603$c/KWh. The client received proposals from eight bidders on 2 October for main contract on the 300MW solar scheme.

A special purpose vehicle, project company, will be formed by the Acwa Power consortium to develop the project and will be 100 per cent owned by the developer.

The 300MW Sakaka plant is the first project to be awarded under the kingdom’s ambitious National Renewable Energy Programme (NREP). Developers are currently working on submissions for the second project under the programme, a 400MW wind project planned to be developed at Dumat al-Jandal. The client has set a submission date of 20 March for proposals.

The NREP sets out a target for 3.45GW of renewable energy to be developed by 2020 under the National Transformation Plan (NTP), and for 9.5GW of renewable energy capacity to be established by 2023.

MEED reported in January that Repdo was planning to begin the tendering process for 4GW of renewable energy projects in 2018.

Turki al-Shehri, head of the Ministry of Energy, Industry & Mineral Resources’ Renewable Energy Project Development Office (Repdo), told the World Future Energy Summit (WFES) in Abu Dhabi that the 4GW will be split into 3.2GW of photovoltaic (PV) solar, with 800MW of wind making up the rest of the capacity to be tendered under the second round in 2018.

According to the Repdo head, Riyadh is planning for about a quarter of the 4GW second round projects to be awarded before the end of 2018.