Saudi Arabia's Acwa Power signed a preliminary agreement with Oman Investment Authority to explore bringing the sovereign wealth fund on as an investor for the 1.1-gigawatt Suez Wind Energy project in Egypt.
The OIA is considering a stake in the project, Acwa Power — the project’s largest stakeholder — said in a statement on Tuesday.
Oman’s sovereign wealth fund will “assess” the possibility of owning up to 10 per cent of the project, which is valued at $1.5 billion, the Riyadh-based utility developer said.
The plant, which is located in the Gulf of Suez and Gabal el Zeit area, is expected to reach financial close by the third quarter of 2024, and will be commercially operational by the end of 2026.
“As we continue to build upon our renewables portfolio in Egypt, we value our continued partnership with Oman Investment Authority as well as Hassan Alam Holdings and believe their collaboration and contribution on this significant wind energy project will strongly enable the energy diversification goals of the nation,” Acwa Power chairman Mohammad Abunayyan said.
Acwa Power currently holds a 75 per cent stake in the project, with Egypt-based Hassan Allam Holding owning the remaining 25 per cent stake.
The initial agreement was signed between OIA and Acwa Power at the Cop27 climate summit being held in Sharm El Sheikh in Egypt.
Thousands of policymakers and experts have gathered in the resort city to refocus efforts on reducing emissions and managing climate change.
Last week, Acwa Power signed an initial agreement to build a 10-gigawatt wind farm in Egypt, likely to be the the world's second-largest.
The value of the project was not disclosed and the final agreements will depend on feasibility studies, as well as the availability of land, the Saudi Energy Ministry said at the time.
Acwa Power already has two solar energy projects and another wind farm project planned in Egypt, which aims to increase its renewable energy sources to 42 per cent by 2035, from about 11 per cent in 2019.
The company develops, invests in and operates power generation and desalinated water plants. It currently has 67 projects in operation or under construction with an investment of more than $66.5bn in 13 countries across Asia and Africa.
It aims to increase its power-generating capacity to 120 gigawatts from 43 gigawatts currently over the next decade.
The amount of electricity generated by wind increased by almost 273 terawatt per hour in 2021, 45 per cent higher than the growth achieved in 2020, according to the International Energy Agency.
Wind is the leading non-hydro renewable technology, having generated 1,870 TWh last year, almost as much as all the others combined.
Capital investments in renewables are set to reach $494bn in 2022, outstripping upstream oil and gas at $446bn for the year, according to Norway-based consultancy Rystad Energy.
The world needs to double its renewable power targets for 2030 to achieve net zero emissions, the International Renewable Energy Agency (Irena) said on Monday.
Countries are aiming to reach 5.4 terawatts of installed renewable capacity by the end of the decade, about half of the 10.8 terawatts of capacity required, according to Irena’s scenario that restricts temperature increases to 1.5°C above pre-industrial levels.