The Red Sea Development Company Finalizes Contract for 100 Percent Renewable Utilities
Deal with ACWA Power ensures The Red Sea Project will be the world’s largest tourism destination powered solely by renewable energy
Riyadh, (07 November 2021): The Red Sea Development Company (TRSDC), the developer behind the world’s most ambitious regenerative tourism project, has finalized its utilities deal with a consortium led by ACWA Power for the The Red Sea Project (TRSP). This confirms the development as the largest tourism project in the world set to be powered solely by renewable energy.
The consortium led by ACWA Power has secured its financing to design, build and operate TRSP’s utilities infrastructure for 25 years, after which the operations are to be transferred back to TRSDC. This includes providing 100 percent renewable power, 24 hours a day, 365 days a year. The consortium will also provide potable water, wastewater treatment, solid waste management, district cooling, telecommunication and data services across the destination spanning an area the size of Belgium.
Today, our determination to show the world that tourism development can be done in a regenerative way reaches a new stage. By choosing not to connect to the national grid and create our own supply of energy, we are guaranteeing that The Red Sea Project will be a self-sustaining, 100 percent renewable tourism destination,
said John Pagano, CEO of TRSDC.
“This also marks an important moment for Saudi Arabia’s Vision 2030, as we secure further external investment into the project, underlining the national confidence in the destination we’re creating along the Red Sea coast”.
Clean energy day and night
The utilities are provided through a concession agreement, with TRSDC committing to be the sole recipient of services for the next 25 years. A consortium led by ACWA Power and made up of both local and international investors will deliver on the contract. Financing comes from a mix of Saudi and international banks, including the UK’s Standard Chartered Bank and China’s Silk Road Fund.
Initial assets will be delivered by December 2022 with the balance coming online throughout 2023, delivering a total generating capacity circa 407 MWp of Solar PV power for Phase 1. By completion, the destination will have the infrastructure in place to generate up to up to 760,000 MWh of renewable energy per year. The power generation assets will also include the world’s largest battery storage facility of 1000 MWh, allowing the destination to remain powered by renewables day and night.
This will create a saving of at least half a million tons of CO2 each year that would otherwise be emitted into the atmosphere. That’s the equivalent to emissions from around 99,000 cars or 78,000 homes.
A unique deal
All of the utility services will be delivered under a single agreement, unique for a contract of this kind. This integrated contract will also require the development of three seawater reverse osmosis (SWRO) desalination plants, which will provide 32,500m3 of clean water to the destination each day and a wastewater treatment facility that will take an innovative approach by using treated waste to create new wetland habitats thus supporting TRSDC in delivering its ambition of enhancing key natural habitats that encourage biodiversity to flourish and the sequestration of carbon.
"As the world grapples with the serious consequences of climate change, it is now mission-critical for nations to develop practical and tangible solutions to achieve net-zero targets. The Red Sea Project, the world's first regenerative tourism project, is an outstanding example of sustainability and environmental stewardship, limiting environmental impact through the provision of zero-carbon emitting utility services all without compromising our quality of life. As another first, in addition to zero carbon emission and zero waste and plastics, all of the utilities for this off grid location will be delivered by ACWA Power under a single agreement, unique for a contract of this kind, said Paddy Padmanathan, President and CEO of ACWA Power
"The Red Sea Project is a vital component of the Saudi Vision 2030, and we are proud to partner with TRSDC in creating a global benchmark that truly embodies the long-term energy transition vision of the nation, now clearly framed by the recently published Nationally Determined Contribution (NDC) towards achieving the climate change targets set at CoP 21 in Paris”, he added.
TRSDC has adopted the same delivery model for the AMAALA utilities package, and has gone to market utilizing a procurement approach similar to that of TRSP, in a move that will realize synergies between the two projects and enable both to remain off grid.
TRSP has already passed significant milestones and work is on track to welcome the first guests by the end of 2022, when the first hotels will open. Phase one, which includes 16 hotels in total and a new international airport, will complete in 2023.
Upon completion in 2030, TRSP will comprise 50 resorts, offering up to 8,000 hotel rooms and more than 1,000 residential properties across 22 islands and six inland sites. The destination will also include luxury marinas, golf courses, entertainment, and leisure facilities.
About The Red Sea Development Company
The Red Sea Development Company (TRSDC - www.theredsea.sa) is a closed joint-stock company wholly owned by the Public Investment Fund (PIF) of Saudi Arabia. TRSDC was established to drive the development of The Red Sea Project, a luxury, regenerative tourism destination that will set new standards in sustainable development and position Saudi Arabia on the global tourism map.
The project is being developed over 28,000 km2 of pristine lands and waters along Saudi Arabia’s west coast and includes a vast archipelago of more than 90 pristine islands. The destination also features sweeping desert dunes, mountain canyons, dormant volcanoes, and ancient cultural and heritage sites. It is designed to include hotels, residential properties, leisure, commercial and entertainment amenities, as well as supporting infrastructure that emphasizes renewable energy and water conservation and re-use, as well as a circular waste management system to achieve zero waste to landfill.
Activity for the first phase of development is well underway and is on track to be completed by the end of 2023. The project has surpassed significant milestones, with over 700 contracts signed to date, worth over SAR 18bn ($4.7bn).
The 100-hectare Landscape Nursery, which will provide approximately 25 million plants for The Red Sea Project and AMAALA, is now fully operational. There are more than 10,000 workers currently on-site and 80km of new roads are now complete, including the new airport road, to better connect the destination. The Construction Village is now open and development is progressing well at the Coastal Village, which will be home to around 14,000 people who will eventually work at the destination.
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