Marubeni Signs a Power Purchase Agreement, Project Finance Agreement and Commences EPC Work for the Rabigh Solar PV IPP Project in the Kingdom of Saudi Arabia（May 21,2021 Updated）
Apr. 09. 2021
Marubeni Corporation (hereinafter, “Marubeni”) signed a Power Purchase Agreement with the Saudi Power Procurement Company (hereinafter, “SPPC”) through a Special Purpose Company (hereinafter, “SPC”) established with Al Jomaih Energy & Water Company Limited (hereinafter, “Al Jomaih”) in January 2021. In March 2021, a loan agreement for limited-recourse project financing for the Rabigh Solar PV IPP Project was signed, and EPC (Engineering, Procurement and Construction) work on the project proceeded the following month.
The SPC will develop, construct, operate, and maintain the 300MW capacity solar PV plant, which will be located in the Rabigh Industrial City of Makkah Province, on land leased by The Saudi Authority for Industrial Cities and Technology Zones, commonly known as MODON. SPPC will purchase the produced power for 25 years following the Commercial Operation Date. This project will be Marubeni’s first solar PV project in the Kingdom of Saudi Arabia.
This loan agreement took the form of co-financing between Japan Bank for International Cooperation, Mizuho Bank Ltd., and Al Rajhi Banking and Investment Corporation.
Marubeni owns stakes in power projects across 19 countries (including Japan) for a total net capacity of about 12GW. This project will be Marubeni’s fourth large-scale solar PV project in the MENA region, following the successful commercial operation of the Sweihan Solar PV IPP Project (1,177MW) in the UAE (*1) and the Amin Solar PV IPP Project (105MW) in Oman (*2), as well as the signing of the Power Purchase Agreement for the Al Kharsaah Solar PV IPP Project (800MW) in Qatar (*3). The generation capacity of the four projects totals nearly 2GW. By utilizing the experience gained through these projects, Marubeni will develop the Rabigh Solar PV IPP Project and provide a stable, renewable energy source in the Kingdom of Saudi Arabia. This project was selected in 2020 for the Financing Programme for Joint Crediting Mechanism (JCM) Model Projects (*4) by the Japanese Ministry of Environment and is implemented through cooperation between the Governments of Saudi Arabia and Japan.
The MENA region has procured numerous large-scale solar PV projects over the last several years, and this trend is projected to continue. As evidenced by the Notification Regarding Business Policies Pertaining to Sustainability in Relation to Coal-Fired Power Generation Business and Renewable Energy Generation Business (*4) issued in September of 2018, Marubeni is committed to being involved in renewable energy projects in MENA and around the world.
(*1) March 1, 2017
Marubeni Corporation enters into Power Purchase Agreement for Sweihan Photovoltaic Independent Power Project in United Arab Emirates
(*2) February 5, 2019
Marubeni Signs a Power Purchase Agreement for the Amin Solar PV IPP Project in Oman
(*3) January 20, 2020
Marubeni Signs a Power Purchase Agreement for Al Kharsaah Solar PV IPP Project in Qatar
(*4) About JCM Model Projects
Ministry of the Environment, Japan, has been implementing the “JCM Model Projects,” which provides financial supports covering up to half of the initial investment costs. The purpose of this model projects is to financially support the implementation of projects which reduce GHG emissions by utilizing leading decarbonizing technologies in developing countries, and in return, to acquire JCM credits for achievement of Japan’s GHG emission reduction and the partner countries emission reduction target.
(*5) September 18, 2018
Notification Regarding Business Policies Pertaining to Sustainability
(In Relation to Coal-Fired Power Generation Business and Renewable Energy Generation Business)
|<Rabigh Solar PV IPP Project>|
|Equity Participation||:||Marubeni 50.1%, Al Jomaih 49.9%|
|Commercial Operation Date||:||July 2023 (Scheduled)|
|Duration of PPA||:||25 years|
|Company Name||:||Saudi Power Procurement Company|
|Representative||:||Osama bin Abdulwahab Khawanandanah|
|Business||:||Procurement of electricity in the Kingdom of Saudi Arabia|
|Company Name||:||Al Jomaih Energy & Water Company Limited|
|Representative||:||Ibrahim Mohammed Abdulaziz Aljomaih|
|Business||:||Development and operation of electricity and water generation plants|