The 300-megawatt Sakaka solar photovoltaic (PV) IPP project is said to be the first utility-scale development that is being built under King Salman’s landmark renewable energy initiative.
Upon completion, the SAR 1.2 billion project will supply more than 75,000 households with green power while offsetting over 430,000 tonnes of carbon dioxide per year. The project will also create new employment opportunities in fields including construction, operations and maintenance as well as enhancing the local capabilities in terms of local content.
Global law firm Hogan Lovells worked as a financial advisor with the lenders in the financing of the mega infrastructure project. Sohail Barkatali, partner – Dubai at Hogan Lovells talks about the complexities of the project and how is it going to affect the Saudi market in the long run.
Here’s the full interview
How is the Sakaka PV project going to affect the Saudi market?
The pace of innovation in Saudi Arabia is likely to accelerate. The Sakaka PV IPP has the most competitive solar tariff - the lowest in the world at the time - paving the way for the renewable energy sector to take off. The renewable energy sector taking off would lead to more employment opportunities as well as sectoral opportunities in the Kingdom.
What are the main complexities that the firm faced while advising the Sakaka PV IPP project?
We are delighted to have worked with the lenders in the financing of Saudi Arabia's first utility-scale solar PV project. The project itself was procured under the newly established Renewable Energy Project Development Office (REPDO). As a new institution, REPDO is responsive and managed to successfully deal with the challenges that arose during the project.
What support did you receive from the Saudi authorities while advising on the project?
We had a very positive experience with the Saudi authorities and regulators on this deal. All the agencies were very keen on bringing this deal to financial close and making it a success. Saudi Crown Prince Mohammed bin Salman, along with King Salman, were present marking the significance of the project.
Do you think more needs to be done when it comes to huge infrastructure projects in the Kingdom?
There are a number of newly established agencies in Saudi Arabia, the roles of which are still being finalised. An example of this is the National Centre for Privatisation & PPP.
What are the infrastructure projects that the law firm is currently working on in Saudi Arabia?
We are currently advising on power and infrastructure public-private partnership (PPPs) projects in Saudi Arabia, including advising sponsors on Taif Airport, lenders on a wind IPP project, lenders on a captive power project, as well as developing the Kingdom's railway law.
What are the company’s plans of expansion in the GCC?
Through our association with Riyadh-based ZS&R Law Firm, we are well placed to provide cohesive, integrated legal advice to national and international clients in the Kingdom. We also have extensive local counsel arrangements in the rest of the GCC.
Write to Paromita Dey at paromita.d@argaamplus.com
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