Big Bucks for Solar: KEPCO’s $4 Billion Bet on Saudi Energy Transition

The state-run Korea Electric Power Corp. has finalized the initial funding phase for its upcoming energy projects in Saudi Arabia, according to the company’s announcement on Wednesday.

KEPCO secured approximately 5.5 trillion KRW ($3.96 billion) in project financing through separate agreements for Saudi Arabia’s Al Sadawi photovoltaic project and the Rumah-1 and Al Nairyah-1 independent power plant projects. These initiatives are set to play a crucial role in supporting the kingdom’s energy transition.

“KEPCO aims to continue expanding its overseas project portfolio, with a focus on new energy sectors and cutting-edge technologies,” the company stated.

The financing was structured as project finance, based solely on the local project entities’ profitability and creditworthiness, without any guarantees from KEPCO.

The company attracted funding from major financiers, including the Export-Import Bank of Korea and several international commercial banks.

In June, Korea’s policy lender Eximbank committed to providing approximately $225 million in project finance for KEPCO’s Al Sadawi solar project.

This contract represents KEPCO’s 22nd and 23rd projects executed through overseas project financing in collaboration with domestic export financing institutions, highlighting the company’s expertise as a developer and operator of international power projects.

With these recent financial agreements in place, the ongoing groundwork for these projects is now set to transition into full-scale construction.

The Al Sadawi solar project, awarded through an international tender in October, is a 2-gigawatt renewable energy initiative, making it the largest solar power project in the kingdom.

Total investments exceeding $1.1 billion will facilitate the installation of approximately 3.7 million solar panels across a desert area spanning roughly 39.6 square kilometers, equivalent to 14 times the size of Seoul’s Yeouido.

KEPCO projects this initiative to generate revenue of about 540 billion KRW ($405 million) over its 25-year lifespan.

The Rumah-1 and Al Nairyah-1 plants, awarded in November, will have a combined capacity of 3.6GW, accounting for nearly 2.5 percent of the national grid’s capacity. These plants are expected to bring in approximately 4 trillion KRW ($3 billion) over 25 years.