Saudi Arabia sets up its first pavilion at the World Future Energy Summit

The kingdom’s renewable ambitions will be on display at the World Future Energy Summit in Abu Dhabi at the country’s first dedicated pavilion at the annual event.

Sultan Al Jaber, UAE minister of state and chairman of clean energy company Masdar, left, and Khalid Al Falih, Saudi Arabia’s minister of energy. A large delegation from the kingdom is attending events throughout Abu Dhabi Sustainability Week. The Saudi Government is set to tender for its National Renewable Energy programme and is seeking insights from the UAE’s experience of renewable energy development, Mr Al Falih said. Courtesy MasdarShow less

Saudi Arabia’s economic diversification drive has fuelled expansion efforts for local energy companies, with new business units popping up, using the kingdom as a springboard to expand to the rest of the world.

Saudi Arabia, which has long relied on oil to generate electricity, plans to produce 9.5GW of electricity from renewables by 2023 as part of its National Transformation Programme.

The kingdom's renewable ambitions will be on display on Monday at the World Future Energy Summit (WFES) in Abu Dhabi at the country's first dedicated pavilion at the annual event. WFES is one of the largest gatherings for the renewable and clean energy industry and is expected to attract more than 38,000 visitors from 175 countries.

“We are in Abu Dhabi because we have a great deal of admiration for the work this nation has done to deploy renewable energy and apply clean technologies,” said Khalid Al Falih, Saudi Arabia’s energy minister.

"Saudi Arabia is incredibly close to launching its National Renewable Energy Programme's first round of tendering and believes this to be an ideal opportunity at the perfect time for the kingdom to gain insights from UAE's renewable energy experiences."

Businesses will be keeping an eye on the Saudi pavilion, as the kingdom is seeking partners to meet its targets.

One company that is keen to jump on the Saudi bandwagon is Abdul Latif Jameel Energy and Environmental Services, part of the Jeddah-based Abdul Latif Jameel group. It announced yesterday that it had established a water company, Almar Water Solutions, with a US$7 billion project pipeline to complement its existing renewable energy projects.

The new business unit seemed a natural fit given the Saudi Arabian government’s diversification targets, said Roberto de Diego Arozamena, ALJ Energy’s chief executive.

“Looking at the 2030 vision, there are implications for water,” he said. “Power is needed for water desalination so we decided to enter into the business not just in the region, but internationally.”

Almar Water will develop projects across the spectrum, including desalination and wastewater treatment. The new company is aiming to develop 23 projects in nine countries over the next decade, rotating assets after a couple of years to invest in other projects. “We want to be an investment company with all the technical capabilities,” said Carlos Cosin, Almar Water’s chief executive.

Almar Water will work alongside ALJ’s renewable energy unit, Fotowatio Renewable Ventures. Mr Cosin said: “By combining water treatment services with a renewable energy offering, we can also help reduce costs and the environmental impact.”

The kingdom’s diversification strategy spans across various sectors, including using 35 per cent of recycled water for the agriculture sector, up from 13 per cent. It also wants to use renewable energy to help provide the power for desalination, an energy-intensive process.

And while investors are waiting to pounce on the country’s planned renewable energy projects, another Saudi Arabian firm is getting its house in order for a public listing.

Riyadh-based Acwa Power is shifting its business strategy to prepare for a dual listing as it looks for new sources of capital.

“We will IPO in the next couple of years but we will likely tap the bond market before this,” said Paddy Padmanathan, the chief executive of Acwa. The company has steamrolled through sectors from conventional power plays to renewable energy in the region from the UAE to Jordan and then down to Egypt.

Acwa’s portfolio, totalling $33bn in investments, includes 85 per cent in conventional power plays such as coal while 15 per cent is in renewable energy. However, the 1,000MW in renewable energy assets were siphoned off to a new company, ReNewCo, in November. Sources said that this was to grab more capital, placating those that do not want to invest in projects such as coal.

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