A consortium of developers has achieved financial close for $1.3 billion in debt funding for utility infrastructure at the Red Sea Project, a massive tourism complex under construction on the coast of Saudi Arabia.
Billed as the world’s most ambitious regenerative tourism development, the project will feature a 320MW solar array and a 1.2GWh battery with the goal of having the mega development 100% powered by renewable energy.
The contract for the off-grid battery energy storage system, the largest of its kind, was awarded to Chinese tech giant Huawei Digital Power last year.
The system is sized to meet the initial scale of the project and can be expanded in line with the complex around it. The solar-plus-storage facility has been designed to enable the Red Sea Project to remain off-grid and powered by renewables, with phase one expected to launch late this year – with the opening of its first hotels – and to be completed next year.
The $1.3 billion financial close for the project's infrastructure has been announced by a development consortium featuring 50% state-owned Saudi energy company ACWA Power, Chinese state-owned entity SPIC Huanghe Hydropower Development Company, and the Saudi Tabreed Cooling Company. The senior debt, denominated in dollars and riyals, will be provided by a consortium of Saudi and international banks.
A joint venture in which ACWA holds a 50% stake was appointed by the The Red Sea Development Company entity – owned by Saudi wealth fund the Public Investment Fund (PIF) – to design, build, operate and transfer The Red Sea Project’s utilities infrastructure under a 25-year offtake contract. The infrastructure contract includes the provision of drinking water, wastewater treatment, district cooling, and solid waste treatment for 16 hotels, an international airport and other facilities that will make up phase one of the development.
“We’re proud to be the provider of all utility services to the very exacting zero-carbon-emission, zero waste, and zero plastic standards and are delighted to have achieved this milestone on yet another path-breaking project that is helping to meet the clean energy ambitions of Vision 2030,” said Paddy Padmanathan, CEO and vice chairman of ACWA Power.
Green finance
The financing announcement comes after a financial close The Red Sea Development Company achieved last month on its debt facilities for the project, to the tune of $3.76 billion. That loan was said to be the first ever riyal-denominated green finance credit facility.
The Red Sea Project – owned by the PIF, which is at the center of the kingdom's Vision 2030 plans to pivot the economy to be less oil-dependent –has said it has already passed significant milestones and work is on track to welcome the first guests this year. Upon completion, in 2030, The Red Sea Project is set to comprise 50 resorts built across 22 islands and six inland sites.
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