South Korean electric utility company, KEPCO, secures 5.5 trillion won for Saudi Arabian energy initiatives
South Korea's Korea Electric Power Corporation (KEPCO) is set to move forward with two significant energy projects in Saudi Arabia, following the successful securing of $4.04 billion in project financing. The projects, the Sadayir Solar Power Project and the Luma 1 & Nairiyah 1 Gas-Fired Combined Cycle Projects, are poised to transition from initial groundwork to full construction.
The Sadayir Solar Power Project, awarded to KEPCO via an international tender in October 2024, is the largest solar power project in Saudi Arabia, with a capacity of 2 gigawatts (GW). This solar renewable energy project is expected to generate approximately KRW 540 billion (about $390 million) in revenue over a 25-year contract period.
The Luma 1 and Nairiyah 1 gas-fired power plants, secured in November 2023, have a combined capacity of 3.8 GW. These large-scale combined cycle gas projects, awarded alongside the solar project, are significant additions to Saudi Arabia’s gas-fired power infrastructure.
KEPCO secured the funding for these projects without any guarantees from itself, relying solely on the project companies’ creditworthiness and revenue prospects. The financing consortium includes the Export-Import Bank of Korea and several international commercial banks.
These projects are part of Saudi Arabia’s broader renewable energy and power infrastructure expansion under its Vision 2030 and Saudi Green Initiative, aimed at diversifying the economy and reducing oil dependency. The projects benefit from highly competitive tariffs and supportive power purchase agreements, fostering strong investment appeal.
KEPCO is also involved in strategic partnerships for local manufacturing of solar photovoltaic (PV) panels in Saudi Arabia. Collaborating with Saudi entities, KEPCO aims to establish factories in Jizan producing 2 GW worth of PV panels annually. This effort aligns with localization goals and the Kingdom’s industrial diversification plans, supporting not just generation capacity but also a resilient renewable supply chain.
In summary, KEPCO’s upcoming projects in Saudi Arabia combine renewable solar and gas-fired power generation, backed by $4.04 billion in project financing from international lenders without direct KEPCO guarantees. These projects are integral to Saudi Arabia’s energy transition and industrial strategy, with local solar panel manufacturing further enhancing their regional impact.
The Sadayir Solar Power Project, with a capacity of 2 gigawatts (GW), is a significant endeavor in the renewable energy industry, generating revenue for KEPCO over a 25-year contract period, mainly through financing from the Export-Import Bank of Korea and international commercial banks.
KEPCO's involvement in local manufacturing of solar photovoltaic (PV) panels in Saudi Arabia, such as the planned factories in Jizan producing 2 GW worth of PV panels annually, not only supports generation capacity but also a resilient renewable supply chain, aligning with the Kingdom’s industrial diversification plans.
