World’s largest oil company, Saudi Aramco, is reportedly considering a $5 billion investment in renewable energy firms. According to the sources, this is a part of plans which will help diversify from crude production.
Towards this endeavour, banks such as HSBC, JPMorgan Chase, and Credit Suisse have been reportedly invited to help Aramco with identifying the potential acquisition targets and also offering advice on deals. Sources revealed that the energy company desired to bring foreign expertise into the kingdom in the renewable energy domain and also added that the first investments under the plan had a possibility of occurrence this year.
Towards transformation of Aramco into a diversified energy company, Saudi Arabia is reportedly planning to produce 10 gigawatts of power by 2023 from renewable energy sources like solar, nuclear, and wind. The kingdom is also planning to produce 30% of its power from renewable energy sources by 2030. As a part, of an economic transformation plan that was announced by Deputy Crown Prince, Mohammed bin Salman, in April, they are also planning to develop a renewable energy research and manufacturing industry.
The energy minister of the country and chairman Aramco, Khalid Al-Falih, said at the World Economic Forum in Davos, Switzerland, that the Saudi Arabia intended to become a global powerhouse of renewable energy inclusive of nuclear power, solar, and wind.
The biggest crude producer of OPEC is planning on a domestic renewable-energy program that would cost nearly $30 billion to $50 billion. Aside from a limited pilot project, the country’s only solar plant which is in operation is a 10-megawatt facility at Saudi Aramco’s headquarters (on top of a parking lot).
The national utility, Saudi Electricity, is reportedly seeking for bids on two solar plants in order to generate 100 megawatts of power. When the crude process was about double, Saudi Arabia had longer-term targets for renewable energy. An earlier solar programme had projected more than $100 billion of investment in various projects in order to produce 41 gigawatts of power by 2040. This deadline was delayed by the government by nearly a decade in January 2015, and reportedly stated that it needed more time to assess the relevant technologies.