KSA: National Renewable Energy Program – Round 2 Request for Qualification

• United Kingdom
• Saudi Arabia

• Energy and infrastructure - Clean energy

28-02-2019

Introduction

The Ministry of Energy, Industry and Mineral Resources of Saudi Arabia (“MEIM”) is responsible for achieving the energy objectives set out in the Saudi Arabia Vision 2030. MEIM created the Renewable Energy Project Development Office (“REPDO”) to deliver these energy objectives. REPDO has already successfully procured two renewable energy projects in Saudi Arabia in Round 1 being the 300 MW Sakaka solar pv project and the 400 mw Dumat Al Jandal wind project.

Round 2 program in Saudi Arabia

Interested parties were asked to submit expressions of interest for the Round 2 program by 14 February 2019. On 27 February 2019, MEIM issued a request for qualification (“RfQ”) from interested parties for two categories of solar pv projects being Category A projects and Category B projects. There are three projects in Category A (50 mw, 45 mw and 20 mw) and four projects in Category B (200 mw, 300 mw, 300 mw and 600 mw). If you want more details about the Category A or Category B projects, please let us know.

Interested parties are now invited to qualify as Managing Member, Technical Member and/or Local Managing Member (“Role”). The Local Managing Member is only relevant for the Category A projects. Interested parties may qualify as any or all of the three different Roles. It is important to note that parties who fail to pre qualify for one of the Roles will be able to join a consortium with parties who have pre qualified for the Roles once the NPQ have been issued.

REPDO will evaluate all bids received as part of the RfQ and will subsequently issue a notice of pre qualification (“NPQ”) to the successful parties setting out what Role they have been awarded. Once NPQs are issued, any party that submits a bid for a Role on a Category A project will not be allowed to submit a bid for a Role on a Category B project.

The NPQ is only relevant for the seven projects forming part of Category A and Category B and subsequent projects will be proceeding under a different set of guidelines where the restrictions set out in this RfQ will not apply.

REPDO is currently asking for parties to submit pre qualification information to act in one or all of the Roles. Interested parties do not need to commit to either Category A or Category B projects at this stage. Once REPDO has issued the NPQ, there will be time for each successful party to form bidder consortiums for the projects in Category A and Category B.

REPDO confirm that the evaluation of bids for the Category A and Category B projects will be inter alia on the basis of levelized cost of electricity and state that they will provide a formula for this calculation in the relevant RFPs for such projects. REPDO also confirm that the Category A and Category B projects will receive a 25 year power purchase agreement and that land will be secured by REPDO and provided to the project company.

There are detailed qualification criteria for each of the three Roles: please let us know if you would like more details. The Managing Member will need to hold at least 30% of the shares in the Project Company. The Local Managing Member will need to hold at least 30% of the shares of the Project Company and be the largest or joint largest shareholder in the Project Company. The Technical Member will need to hold at least 20% of the shares in the Project Company. All the shareholding requirements will be relaxed after the commercial operation date.

Conclusion

As a reminder, the revised targeted overall planned renewable energy capacity to be installed in Saudi Arabia is 27.3 GW by 2024 and 58.7 GW by 2030. In line with the above targets and in addition to the Round 2 projects, REPDO expects to launch five additional renewable projects during the second half of 2019 with a total capacity of approximately 1.6 GW. Such projects will be grouped into rounds and will be subject to one or more additional RFQ in the future.

Eversheds Sutherland in association with AlDhabaan & Partners continue to advise clients on the Round 1 projects in Saudi Arabia through a combination of our global clean energy team and our local office in Riyadh. Please do get in touch for further information on the detailed timetable, if you have any questions, or would like us to help you with your Round 2 projects in Saudi Arabia.