Saudi Arabia's Public Investment Fund (PIF) has created an energy service company (esco) that will increase energy efficiency for government and public buildings, the sovereign wealth fund said on Wednesday.
Super Esco was established to “stimulate the growth of the kingdom’s energy efficiency industry, in line with the objectives of Vision 2030 to diversify the economy and drive environmental sustainability”.
All government bodies are mandated to contract the new entity on an exclusive basis as per a royal decree.
PIF said that the company, with a capitalisation of 1.9 billion riyals (Dh1.86bn), will fund and manage the retrofit of the buildings. These projects represent more than 70 per cent of the overall projects in the country's energy efficiency sector.
_____________
Read more:
[ Saudi Arabia sets up $1 billion fund to support SMEs ]
[ Saudi Aramco, Russia move to shake up gas markets, say analysts ]
_____________
While this is a collaboration among the energy and finance ministries, the main body overseeing the new company will be the Saudi Energy Efficiency Centre (SEEC).
SEEC was established in 2010 to be the regulatory body over the sector, granting licences to approved escos.
However, since its inception, only two companies – Shaker Company and Energy Efficiency Era – have received esco licences.
While PIF said that Super Esco will create partnerships with the private sector offering new investment opportunities, it is unclear if companies will still need to register under the SEEC to partner with Super Esco.
PIF could not be reached for comment.
The kingdom wants to cut domestic oil usage, a big part of which is used in power generation.
PIF said that the energy efficiency industry had an estimated value of 42bn riyals, which translates to 3bn riyals a year until 2030.
King Abdullah Petroleum Studies and Research Centre (Kapsarc) released a report last year that said energy efficiency programmes could reduce electricity consumption by 30 per cent.
These types of measures would displace the need for new power generation capacity, saving around US$28bn over a decade.
The report said that the implementation of retrofit programmes will require both innovative financing mechanisms and a push for institutional capacity building in energy auditing and management.
“If such support programmes are successful, we estimate that implementing the measures outlined in this paper has the potential to deliver up to an extra 247,000 skilled jobs per year over a 10-year period,” Kapsarc said.
