By:PV-tech

Chinese engineering firm Shanghai Electric and UAE state-owned renewable energy company Masdar have signed an agreement to build a 2GW solar project in Saudi Arabia.

The Sadawi project will be Shanghai Electric’s largest engineering, procurement and construction (EPC) contract globally, and will cover 40 square kilometres. The companies did not specify which technologies would be used at the project, but Shanghai Electric said it would use “advanced photovoltaic technology” at the facility.

“This is a new starting point for Shanghai Electric and Masdar to carry out comprehensive cooperation and an important milestone for Shanghai Electric to further establish itself in the Middle East’s new energy market,” said Shanghai Electric chairman Wu Lei. “I hope both parties will work together to create a benchmark demonstration project and contribute more to the global energy transition.”

The project will be a part of Saudi Arabia’s National Renewable Energy Program (NREP), itself part of the Saudi Vision 2030 initiative, which aims to build a “vibrant society”, “a thriving economy” and “an ambitious nation”. Shanghai Electric first won the EPC contract for the project in November 2024, when the project was announced as part of the fifth round of the NREP.

The NREP component of Vision 2030 includes a plan to increase the contribution of renewable energy sources to Saudi Arabian electricity generation to around 30%, up from around 0.5% in 2022, according to the International Energy Agency (IEA). Following the fifth round of NREP auctions, the programme has tendered 10.3GW of renewable power projects, of which 8.1GW are for solar capacity.

The arrangement is the latest example of cooperation between China and Saudi Arabia in the solar industry; as of 2023, Saudi Arabia was the sixth-largest importer of Chinese modules, with a total import value of US$1.34 billion. However, as tariff tensions between China and the US have escalated, Chinese companies have sought to expand their influence in markets outside of the US beyond simple module shipments.

“Investing in a Saudi plant means that the company has shifted from a passive strategy to avoid trade barriers to active production planning,” Jinko Solar vice president Qian Jing told PV Tech Premium earlier this year.

Shanghai Electric also announced plans to work with Saudi investment company the Mawarid Group to develop a wind project in Oman.