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The National Agricultural Development Co.’s (NADEC) board of directors has approved a solar power purchase agreement (PPA) with France-based World Energy Actor (ENGIE), the company said in a bourse statement on Sunday.
Under the 25-year agreement, a 30 megawatt (MW) solar power project will be built at NADEC City in Haradh through integration with the company’s current energy resources.
“NADEC will not seek any financing in respect of the project as it will not incur any capital or operational expenditure,” the company noted without disclosing the value of the deal.
NADEC will purchase energy from ENGIE at a fixed price of 9.4 halalahs per kilowatt/hour.
Construction is expected to kick off on Oct. 31, 2019, while the project is likely to begin commercial operations on Oct. 31, 2020 with an operational trial period of 60 days.
“According to the company's initial estimates, the financial savings from the reduction in fuel consumption will start gradually from the date of operation based on the fuel prices prevailing at the time,” the statement added.
The project is expected to reduce NADEC’s fuel consumption to 124,000 barrels per year, which will help reduce carbon emissions by 53 million kilograms annually.
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