Taqa consortium secures $4 billion funding for two Saudi power plants

Construction of Rumah 2 and Al Nairyah 2 projects 'well under way'

Abu Dhabi-listed Taqa has assets in the UAE and across key markets around the world. Vidhyaa Chandramohan for The National

A consortium including Abu Dhabi National Energy Company, known as Taqa, has secured $4 billion in financing for two power plants being built in Saudi Arabia, as the kingdom continues to address its increasing energy demand.

Taqa, Jera – Japan’s largest power generation company, and Saudi Arabia's AlBawani Capital reached financial close for the construction of the Rihab ElAwal Power Company and Nawras Power Company, Taqa said on Wednesday.

Financing was secured from regional and international lenders through senior debt and equity bridge loans. Lending institutions include Al Rajhi Bank, Riyad Bank, Saudi Awwal Bank, Saudi National Bank, Arab Petroleum Investments Corporation, Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, Bank of China and First Abu Dhabi Bank, Taqa's statement said.

The financing came after the consortium signed two 25-year power purchase agreements, with the greenfield combined cycle gas turbine (CCGT) power plants set to deliver approximately 3.6 gigawatts of power generation capacity.

The projects are being developed on a build, own and operate basis and will support Saudi Arabia’s growing energy need.

The construction of the two projects – known as Rumah 2 and Al Nairyah 2 – is “well under way”, with early work concluded recently, said Farid Al Awlaqi, chief executive of Taqa's generation business.

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Saudi Arabia, the Arab world's biggest economy, continues to diversify its energy mix as it adheres to global sustainability goals and reshapes its economy with alternative and greener sources. In July, Saudi Arabia signed agreements worth more than 31 billion riyals ($8.3 billion) for seven renewable energy projects to boost its green energy capacity.

Taqa said both the greenfield power plants are designed for future carbon capture integration, supporting the Ministry of Energy's decarbonisation goals.

The projects are also in line with the Saudi Green Initiative's ambition to achieve net-zero greenhouse gas emissions through a circular carbon economy by 2060.

Established in 2005, Abu Dhabi-listed Taqa is a diversified utilities and energy group with assets in the UAE, Canada, Ghana, India, Morocco, Oman, the Netherlands, Saudi Arabia, the UK and the US. It is also a shareholder in Abu Dhabi Future Energy Company (Masdar), along with Mubadala and Adnoc.