Saudi Arabia to tender 600MW solar plant in Makkah this year

The project will be part of a larger 2,600MW scheme being developed in the western province

The Saudi energy ministry will tender the first phase with the second to be managed by the kingdom's Public Investment Fund. EPA

Saudi Arabia plans to build a 2,600 megawatts solar project in the holy city of Makkah as the world's largest oil exporter increases momentum for renewable energy.

A contract for 600MW will be tendered this year, with the project set to be developed in two phases, the Saudi Energy Ministry announced in a tweet.

The initial phase will be developed after a bidding process through the ministry and the remainder will be developed by the Public Investment Fund, the country's sovereign wealth fund, and its partners.

A preliminary agreement was signed between the Energy Ministry and the emir of the Makkah province to develop the Al Faisaliah solar project.

Saudi Arabia, which is moving away from burning crude for power generation, wants to increase power generation from renewables. PIF will develop up to 70 per cent of the kingdom's renewable energy capacity, with plans under way to use up to 60 gigawatts from clean sources over the next decade, the country's Minister of Energy Khalid Al Falih said in January.

Saudi Arabia's Renewable Energy Project Development Office (Repdo) has been tasked with tendering the remaining 30 per cent of capacity. About 9.5GW of solar and wind capacities had been earlier earmarked for development by 2023. The kingdom has already begun switching from burning crude to gas-fired power plants.

Saudi Arabia earlier this year awarded a contract to develop its first wind project, a 400MW scheme in the country's north, to a consortium led by France's EDF and Abu Dhabi's clean energy operator Masdar.

The kingdom also awarded its first utility-scale photovoltaic solar plant last year. The 300MW project in the northern Al Jouf area was awarded to Riyadh's Acwa Power, in which PIF has a 25 per cent stake.

The sovereign fund is also working with Japan's Softbank to develop a massive $200 billion solar scheme.