ESG

Saudi Electricity Company has successfully aligned its funding for the Taiba 1 and Qassim 1 Independent Power Plant (IPP) projects, securing SAR 11.4 billion (USD 3.04 billion) of non-recourse financing in May.

Taiba 1 and Qassim 1 are IPP projects boasting a total combined cycle gas turbine (CCGT) capacity of 3,600 megawatts (MW), awarded to SEC by the Saudi Power Procurement Company (SPPC) in October 2023, as part of a consortium with ACWA Power. Moreover, a 25-year power purchase agreement was inked with SPPC for both projects in November 2023, structured on a build, own, and operate (BOO) basis.

These cutting-edge facilities signify a significant leap forward in Saudi Arabia's energy landscape, symbolising a decisive shift towards a more sustainable future. By utilising state-of-the-art combined cycle gas turbine technology with the highest eciency, these plants will replace oil-based generation, resulting in a substantial reduction in carbon emissions and the promotion of environmental responsibility.

The financing arrangements were facilitated by the respective project companies: Sidra One Electricity Company for Taiba 1 and Qudra One Electricity Company for Qassim 1. The SEC holds an effective 40% stake in each entity.

The projects epitomise SEC’s dedication to expand its generation fleet with the latest technologies and advance its goal of achieving net-zero emissions by 2050, perfectly aligning with the kingdom's own ambitious energy transition and energy mix aspirations.

The Taiba 1 and Qassim 1 plants mark the initial phase of a series of CCGT plants, propelling Saudi Arabia towards a balanced energy mix and maximising local content contribution, as envisioned by the Saudi Vision 2030 – a strategic roadmap for the country’s sustainable future.

Furthermore, these projects pave the way for the kingdom's Green Initiative, targeting net-zero emissions by 2060. The plants' inherent design allows for seamless integration of carbon capture facilities in the future, further underlining SEC's commitment to environmental stewardship, social responsibility, and governance.

GREEN MEASURES

The Saudi government, in collaboration with the United Nations Environment Programme (UNEP), also launched campaigns aimed at combating desertification, restoring ecosystems, and bolstering drought resilience ahead of World Environment Day (WED) celebrations in April.

The announcement was made by Eng. Abdulrahman Alfadley, minister of environment, water, and agriculture, during the inauguration of Environment Week 2024. The annual event, organised by the Ministry of Environment, Water, and Agriculture, seeks to raise environmental awareness among individuals.

Dr. Osama Faqeeha, deputy minister for environment, emphasised the shared responsibility in addressing land degradation and desertification. He stressed the importance of collaboration among policymakers, the private sector, and civil society organisations to restore agricultural areas, rehabilitate land, and combat desertification and drought.

Dr. Faqeeha highlighted the significance of global investments in conserving nature, restoring lands, and advancing sustainability, especially on World Environment Day.

The UNEP, which spearheaded the global campaign, warned that without action, 95% of the Earth's land could be degraded within the next 30 years, and has called for collective efforts from grassroots to governments to tackle climate and extinction crises by restoring vital ecosystems. 

In parallel, Adel bin Ahmed Al-Jubeir, minister of state for foreign aairs, cabinet member, and envoy for climate affairs, rolled out the kingdom's significant allocation of USD 2.5 billion to the Middle East Green Initiative and underscored the importance of afforestation in addressing climate change and achieving the goals outlined in Saudi Vision 2030.

"As the world's largest oil producer," Al-Jubeir stated, "the kingdom feels a responsibility toward the climate and aims to lead eorts in combating climate change, not only by adhering to international standards, but also by shaping them."

CORAL RESTORATION

Additionally, the King Abdullah University of Science and Technology (KAUST) and NEOM have commenced work on the KAUST Coral Restoration Initiative (KCRI), the world's largest coral restoration project. With funding from KAUST, the initiative aims to restore reefs worldwide, leveraging KAUST's expertise in marine ecosystems. 

Home to 25% of known marine species despite covering less than 1% of the sea floor, coral reefs are the bedrock of numerous marine ecosystems.  

"This is one reason why scientists are so concerned about the rising rate of mass bleaching events, with experts estimating up to 90% of global coral reefs will experience severe heat stress annually by 2050," according to the entities.

The initiative includes the establishment of the world's largest land-based coral nursery, set to nurture 400,000 corals annually, in NEOM. NEOM CEO, Nadhmi Al-Nasr, expressed the company’s dedication to sustainability and innovative solutions for global environmental challenges, underscoring the importance of coral reef preservation.

Through these collaborative efforts, Saudi Arabia aims to lead in environmental conservation, climate action, and sustainable development, contributing to global efforts to safeguard the planet for future generations.