PIF partners with Chinese manufacturers to make components for the wind and solar energy here at home

The Public Investment Fund signed three separate agreements with major Chinese producers to localize the manufacturing of wind and solar power generation components, it said in a statement yesterday. The agreements were signed by the PIF’s wholly-owned subsidiary Renewable Energy Localization Company (Relc) along with Riyadh-based and privately owned renewable energy firm Vision Industries. Financial details on the agreements were not made public.

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One for wind: Relc will partner with Envision Energy (China’s second-largest wind turbine manufacturer) and local player Vision Industries to make wind turbines, as we noted in yesterday morning’s issue. The JV will focus on the manufacturing and assembly of wind turbines and its components, including blades with an estimated annual generation capacity of 4 GW. Its ownership structure will see the Chinese company hold a stake of 50% with a 40% and 10% stake for Relc and Vision.

Two for solar: The second JV agreement was signed with China’s solar module manufacturer JinkoSolar and Vision Industries for the manufacturing of 10 GW of photovoltaic cells and modules. Relc and JinkoSolar will both hold a 40% stake each with Vision owning 20%. A third agreement was signed with Lumetech — a subsidiary of China’s TCL Zhonghuan Renewable Energy — along with Vision for the production of solar PV ingots and wafers with annual capacity to generate 20 GW of power. The JV will see Relc and Lumetech owning a 40% holding each with Vision holding 20%.

We’ve been expecting this: Officials in Beijing discussed last week ramping up trade and investment with Saudi in a sign of a growing interest in the region. They have singled-out priority areas including infrastructure and energy as well as the digital and green economies.

What they said: “The new agreements are part of PIF’s efforts to localize advanced technologies in the renewable sector in Saudi Arabia… and contribute to localizing the production of 75% of the components in renewable projects by 2030. These projects will also enable Saudi Arabia to become a global hub for export of renewable technologies,” PIF Deputy Governor and Head of Mena Investments Yazeed Al Humied said.

How the fund’s renewables portfolio is looking: The PIF is currently developing eight renewable energy projects with a total capacity of 13.6 GW through renewables giant Acwa Power and the fund’s fully-owned subsidiary Badeel, according to the statement. The PIF and and its partners have committed some USD 9 bn to the projects. The PIF owns a 44.2% stake in Acwa Power.

Growing interest in renewables as Saudi eyes a future beyond oil: The Energy Ministry launched last month what it said was an “unprecedented” geographic survey to identify sites that could be used to grow the renewable energy industry. Contracts for the project, which the ministry says is the first of its kind, were awarded to local firms to install 1.2k stations to measure solar and wind energy over 850k sqm. The Kingdom plans to generate 50% of its electricity from renewable energy sources by 2030.