Saudi Aramco, the world’s largest oil company, is considering as much as $5 billion of investments in renewable energy firms as part of plans to diversify from crude production, according to people with knowledge of the matter.

Banks including HSBC Holdings Plc, JPMorgan Chase & Co. and Credit Suisse Group AG have been invited to pitch for a role helping Aramco identify potential acquisition targets and advising on deals, the people said, asking not to be identified as the information is private. The energy company is seeking to bring foreign expertise in renewable energy into the kingdom, the people said, adding that first investments under the plan could occur this year.

Saudi Arabia is planning to produce 10 gigawatts of power from renewable energy sources including solar, wind and nuclear by 2023 and transform Aramco into a diversified energy company. The kingdom also plans to develop a renewable energy research and manufacturing industry as part of an economic transformation plan announced by Deputy Crown Prince Mohammed bin Salman in April.

Saudi Aramco, HSBC, Credit Suisse and JPMorgan declined to comment.

The kingdom intends to become a global “powerhouse” of renewable energy including solar, wind and nuclear power, the country’s Energy Minister and chairman of Aramco, Khalid Al-Falih, said at the World Economic Forum in Davos, Switzerland. By 2030 the kingdom wants to produce 30 percent of its power from renewable energy sources.

Energy Program

OPEC’s biggest crude producer is embarking on a domestic renewable-energy program costing $30 billion to $50 billion. The country’s only solar plant in operation, aside from a limited pilot project, is a 10-megawatt facility on top of a parking lot at Saudi Aramco’s headquarters. The national utility, Saudi Electricity Co., is seeking bids for two solar plants to generate a combined 100 megawatts.

Saudi Arabia previously had longer-term targets for renewable power when crude prices were about double current levels. Its earlier solar program forecast more than $100 billion of investment in projects to produce 41 gigawatts of power by 2040. The government delayed the deadline for meeting that capacity goal by nearly a decade in January 2015, saying it needed more time to assess the relevant technologies.

Source:
courtesy of BLOOMBERG

by Matthew Martin

If you have any stories or news that you would like to share with the global online community, please feel free to share it with us by contacting us directly at [email protected]