Riyadh Cement Signs 25-Year Solar Power Purchase Agreement in Saudi Arabia, Set to Begin Operation in Q4 2027

en.Wedoany.com Reported - On September 14, Riyadh Cement Company signed a 25-year solar power purchase agreement with Samana Energy. According to the announcement submitted by Riyadh Cement to the Saudi Exchange, the company expects to pay an average of approximately SAR 6 million per year, excluding VAT, over the entire contract period; the related solar power generation system is scheduled to begin operation in the fourth quarter of 2027.

The agreement adopts a long-term power purchase model, under which Riyadh Cement will purchase electricity generated by Samana Energy's solar power generation system. The company disclosed that the tariff under the agreement will be lower than its current cost of self-generated electricity and also lower than the cost of electricity obtained from Saudi Energy Company. Riyadh Cement is not required to provide construction financing for the power generation project, nor does it bear the project's capital expenditures and operating expenses. Implementation of the project remains subject to obtaining the permits and approvals required by the relevant authorities.

According to the current timetable, the power generation system is expected to begin operation in the fourth quarter of 2027. Riyadh Cement expects that the electricity cost savings will gradually materialize starting from the first year of operation, and the actual financial impact will be determined based on the energy prices corresponding to the electricity supplied by the project at that time. The Saudi Exchange disclosure did not publish the installed capacity, expected annual power generation, or specific generation site of the solar system.

Riyadh Cement currently has black cement and white cement production facilities in Muzahimiyah, Riyadh Province. Its black cement production system includes two clinker production lines, each with a designed black clinker capacity of 1.7 million tons per year; its white cement production facilities have an additional designed white clinker capacity of 320,000 tons per year. The company can also use one of its production lines to produce white clinker.

This 25-year power purchase arrangement differs from Riyadh Cement's previous model of directly investing in power generation facilities: the contract explicitly places investment and operational responsibility for the power generation project on Samana Energy's side, while Riyadh Cement pays energy fees as the long-term power purchaser. The substantive implementation milestones after the contract takes effect include obtaining the relevant permits and approvals, as well as completing construction of the power generation system and entering the operational phase in the fourth quarter of 2027.