New Chinese partnerships to help transform Saudi Arabia into a key hub for renewable energy components

The deals are the latest investments by Saudi Arabia’s Public Investment Fund (PIF) to support the kingdom’s Vision 2030 blueprint for a diversified and sustainable economy, and its National Energy Renewable Programme that targets 50% of the nation’s energy mix to be renewables by 2030.

The first agreement involves a joint venture with the Chinese wind power technology company Envision Energy and the Saudi firm Vision Industries. It will involve the manufacture and assembly of wind turbine components including blades, nacelles and hubs, with an estimated annual production capacity of 4 GW. Renewable Energy Localization Company (RELC; a fully-owned PIF company) will hold 40% of the joint venture, with Envision holding 50% and Vision Industries holding 10%.  

The second joint venture, with China’s Jinko Solar and Vision Industries, will see the construction and operation of a high-efficiency solar cell and solar module manufacturing facility in Saudi Arabia that will have an annual production capacity of 10 GW. RELC will hold 40% of the venture, Jinko Solar 40% and Vision Industries 20%.

The third agreement is with Lumetech, a subsidiary of China’s TCL Zhonghuan Renewable Energy, along with Vision Industries. The partners plan to build a solar photovoltaic ingot and wafer* manufacturing facility with annual production sufficient to generate 20 GW of power. RELC will hold 40% of the joint venture, Lumetech 40% and Vision Industries 20%.

China’s clean energy companies have increasingly been looking to Saudi Arabia to internationalise their manufacturing bases in order to ease the pressure of high inventory and excessive capacity in their domestic market and in the face of trade tariffs and worsening trade tensions with the US and Europe.

Yazeed Al-Humied, Deputy Governor and Head of MENA Investments at PIF, comments: ‘The new agreements are part of PIF’s efforts to localise advanced technologies in the renewable sector in Saudi Arabia and meet commitments to increase the share of local content, as well as contribute to localising the production of 75% of the components in Saudi Arabia’s renewable projects by 2030 in line with the Ministry of Energy’s National Renewable Energy Program. These projects will also enable Saudi Arabia to become a global hub for export of renewable technologies.’

PIF, through Acwa Power and Badeel, is currently developing eight solar energy projects – Sudair, Shuaibah 2, Ar Rass, Al Kahfah, Saad 2, Haden, Muwayh, Al Khushaybi – with a total capacity of 13.6 GW, involving over $9bn of investment from PIF and its partners.  

The term ‘ingot’ refers to a quantity of processed crystalline silicon, which is subsequently sliced into ‘wafers’ which are used in solar photovoltaic panels.