SunEdison, Saudi Arabia's state-run Public Investment Fund (PIF) and the Saudi Arabian Investment Company (Sanabil Investments) signed an agreement on Tuesday to jointly fund a feasibility study for the establishment of a vertically integrated solar PV manufacturing complex at Wa'ad Al Shammal in Saudi Arabia.
The move follows a preliminary study between the National Industrial Clusters Development Program (NICDP) and SunEdison carried out last year.
The proposed project would entail the production of polysilicon through modules. In addition to supporting the growth of Saudi Arabia's burgeoning solar energy industry, the endeavor also provides a major beachhead for SunEdison in one of the world's most attractive and untapped solar markets.
"We anticipate substantial growth of solar PV within the Kingdom and the region," said SunEdison CEO Ahmad Chatila. "This project will support that growth, and the growth aspirations of SunEdison and our Saudi partners. The combination of SunEdison technology and the Kingdom's world-class manufacturing and energy sector expertise will enable us to capitalize on substantial growth in the Kingdom and the region and maximize the value of solar PV projects supported by this venture."
The complex would use both SunEdison's proprietary high pressure silane fluidized bed reactor (HP-FBR) polysilicon, continuous Czochralski (CCz) crystal ingot technology and equipment and include solar wafer, cell and module manufacturing. The approximately $6.4 billion project would employ debt financing and begin construction in 2017, ramping to 3 GW annually.
A significant percentage of polysilicon and ingot production would support the 3 GW planned module output, with the remaining crystal production addressing the market with a substantial cost advantage, SunEdison said in a statement.
Saudi Arabias Ministry of Petroleum and Minerals will provide the required quantities of natural gas and the Saudi Electrical Company (SEC) will provide the needed power requirements for the project.
The project would enable domestic companies to gain access to and benefit from SunEdison's technology and downstream platform for solar energy development in Saudi Arabia and regional markets, the company added.
Chatila added that SunEdison would bring its downstream PV development expertise to the region, and partner with the country to build "a large and dynamic solar energy industry. This agreement represents our ongoing strategy to accelerate our growth, maximize the value of our PV projects, and strengthen our balance sheet to enable both. We are very proud to take this next step with our Saudi partners as the Kingdom becomes a world leader in solar energy."
NICDP President Azzam Shalabi said the project would "be capable of building a complete industrial eco-system that is sustainable and able to compete on a global level by utilizing pioneering technology developed by SunEdison to produce high purity polysilicon, and high-efficiency, low-cost mono-crystalline ingots, in addition to benefiting from economies of scale given the size and vertically integrated nature of the complex."
Saudi Arabia unveiled ambitious renewable energy plans last year, including a 6 GW solar target by 2020. The achievement of that goal will require the installation of around 10,000 solar panels a day, according to the Saudi Arabia Solar Industry Association (SASIA).
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