Saudi officials and energy company executives gathered in Riyadh to finalise a landmark clean-energy agreement. The deal, led by utility ACWA Power in partnership with the Public Investment Fund’s energy arm (Badeel) and Aramco Power (SAPCO), covers seven major projects across the Kingdom.
It includes five large solar photovoltaic (PV) farms and two wind farms, together amounting to about 15 gigawatts of new capacity. The total investment is roughly USD 8.3 billion, making this one of the largest renewable-energy commitments globally.
Splurging Money On Renewables
Five solar farms are located in key regions, including Aseer, Medina, Mecca, and Riyadh, collectively providing the majority of the 15 GW. Additionally, two wind farms are being constructed near Riyadh to take advantage of the strong desert winds.
Finally, ACWA Power leads the development, while Badeel (owned by Saudi Arabia’s sovereign wealth fund, PIF) and SAPCO (Aramco’s power unit) hold large equity stakes. The Saudi Power Procurement Company will be the off-taker under long-term power-purchase contracts.
The investment size will be approximately SR 31 billion (about USD 8.3 billion) and will finance these seven plants. This capital outlay underlines investor confidence in Saudi Arabia’s energy strategy.
ROI And Economic Benefits
Investors expect stable, long-term returns from these projects. Under the agreements, the government-backed off-taker will buy the power for 25 years, guaranteeing revenue streams for developers.
Modern solar technology in Saudi Arabia is extremely cheap, and recent auctions saw record-low generation costs (around $10.4 per MWh). Solar farms can produce electricity for well under two cents per kWh, making profits sizable once locked-in PPA prices are higher.
Economists note several direct economic benefits of turning to solar. It has lower power costs. Cheap solar and wind power can reduce the Kingdom’s dependence on costly fuel inputs (like natural gas or oil used in older plants). Over time, this frees government funds and consumer spending for other uses.
Moreover, large infrastructure projects create thousands of construction and operations jobs. Studies suggest that ramping up renewables in Saudi Arabia could generate “tens of thousands” of jobs as the clean-energy sector grows. Then, there is the stable investment return.
The 20–25-year power contracts mean predictable cash flow for investors. Such project financing typically aims for solid mid-single-digit or higher returns, far more secure than volatile oil revenues. Finally, economic diversification attracts global capital into renewables and helps broaden the economy beyond oil. It encourages the development of new industries (like equipment manufacturing and maintenance services) and can boost technology transfer.
Alignment With Vision 2030
This investment is a direct outgrowth of “Saudi Vision 2030,” the Kingdom’s long-term development plan to diversify the economy. Vision 2030 has set ambitious clean-energy targets: by 2030, half of Saudi Arabia’s power generation should come from renewables, implying roughly 130 GW of capacity. The new solar and wind plants alone contribute 15 GW toward that goal.
The policies under the ambitious diversification agenda and their implementations have already seen non-oil revenue sources (like value-added tax and new industries) pushing oil’s share of government income below 70%. Scaling up renewables will further reduce hydrocarbon reliance.
In fact, energy ministry officials view these projects as part of a national renewable programme to meet the growing electricity demand and climate objectives. The Kingdom plans not only to power its cities with clean energy but eventually to export surplus solar and wind power or derivatives (such as green hydrogen) abroad.
Key “Vision 2030” and climate goals include 50% renewable power by 2030, and these projects bring Saudi Arabia closer to that mark. Net-zero emissions by 2060 will displace millions of tons of carbon each year and support the country’s long-term pledge. New technology hubs plan to manufacture solar panels, wind turbines, and electrolyzers locally, aiming to transform Saudi Arabia into a regional green-tech centre.
Broader Diversification
Beyond “Vision 2030,” the USD 8 billion deal signals Saudi Arabia’s broader economic pivot. Oil prices can swing wildly, and a heavy reliance on oil revenues has historically made the budget vulnerable. By contrast, renewables provide stable costs and homegrown energy security. As Columbia University researchers note, investing in renewables underpins fiscal resilience and helps guard against future oil shocks.
In practical terms, adding 15 GW of clean capacity will reduce the need for oil- or gas-fired power plants and free up more oil for export. That strengthens national finances while cutting fossil fuel imports. It also cements Saudi Arabia’s leadership in the region’s energy transition. Already, it is projected that by 2030, almost one-third of Middle East electricity will come from renewables, with Saudi projects delivering a lion’s share.
The economic ripple effects include expanding private sector investment (as firms and investors see Saudi stability) and offering cheaper electricity to attract industry. Over time, Saudi Arabia hopes to shift from being merely a supplier of oil to an exporter of clean energy and green know-how.
This renewables push is a financial bet that diversifying into clean power will pay off by bolstering growth, safeguarding against oil volatility, and, most importantly, positioning the Kingdom for the global low-carbon future.