Agreement comes amid increasing efforts to engage Chinese companies across the energy value chain
Acwa Power, Energy China to look at joint investment opportunities
Saudi Arabia's Acwa Power has signed an agreement with state-owned Energy China to explore for joint investment opportunities in power and water desalination across the Middle East and Asia, as regional renewables activity is expected to expand.
The agreement would allow for the greater strengthening of relationship with China in the region, said Paddy Padmanathan, president and chief executive of Acwa Power.
The news comes amid a growing push to engage Chinese companies across the energy value chain in the Middle East. China, which has overwhelmingly relied on fossil fuel-based resources to power its economic growth, has taken a significant step to shut down polluting factories that lead to smog in its metropolises and embrace cleaner energy. China's green efforts will see investments of up to US$360 billion (Dh1.32 trillion) in renewable energy by 2020 and the closure of nearly 85 coal-fired power plants.
Riyadh-based Acwa Power, which has been snapping up renewable energy contracts across the region, awarded Shanghai Electric work on the 700-megawatt phase four of the Mohammed bin Rashid solar park earlier this month. Acwa Power is undertaking the development of the phase with Dubai Electricity and Water Authority, with Shanghai Electric appointed as the engineering, procurement and construction contractor.
Acwa Power recently submitted a bid on Saudi Arabia's first-ever wind project – a 400MW scheme in the country's northern Al Jouf region.
Developers such as Acwa Power are ramping up efforts to tap into a lucrative renewables project market opening up in the Middle East, where Saudi Arabia, the region's biggest oil exporter, is expected to tender about four gigawatts of solar and wind projects this year alone. Its renewables ambitions form part of efforts to burn less oil for power and spare more barrels for export.
Mr Padmanathan told reporters in March that he expected Saudi Arabia's newly established Renewable Energy Development Office within the Saudi ministry to launch 11 solar and wind tenders this year.
In an earlier version of this story, a photo caption accompanying the report stated incorrectly that Acwa Power was a renewables company and that it had awarded Energy China the fourth phase of work on the DEWA project. In fact, Acwa Power is a developer, investor, co-owner and operator of a portfolio of power generation and desalinated water production plants and the fourth phase DEWA award was given to Shanghai Electric.