- Saudi Arabia has announced it will grant industrial licenses to the renewable energy companies operating in the country
- It will also provide incentives to the players with a view to encourage further investment in this strategic sector
- Giving renewable energy a strategic industry tag, Saudi Arabia sees it helping the nation reduce its liquid fuel dependence and become a regional hub for electricity production and exports
The Saudi Arabian government, through its Ministry of Industry and Mineral Resources, Ministry of Energy and the Non-Oil Revenues Development Center, has launched a new initiative under which it will provide various incentives to companies operating in the space of renewable energy and electricity production.
Among the incentives planned, it will grant industrial licenses to such companies along with exemptions in custom duties. It is part of the government’s plans to support strategic sectors given their importance in the national economy.
The ministry said this would support the achievement of targets as laid down in the Vision 2030 that sees Saudi Arabia becoming a regional hub for electricity production and exports. At the same time, by supporting renewable energy as a full-fledged strategic industry, it can attract investments to the country in various industries.
Exploiting renewable electricity is an important factor for the country as it tries to reduce the consumption of liquid fuels in the energy generation space with the objective of reaching about 50% renewables and natural gas share in the total energy mix by 2030. The target under the Saudi Vision 2030 document is for the country to grow its renewables capacity to 60 GW, with 40 GW being contributed by solar PV alone (see Saudi Arabia Aims For 40 GW Solar By 2030).
Companies desirous of industrial licenses can apply for the same through the government’s Senaei platform under the Ministry of Industry and Mineral Resources that offers several benefits and incentives to the beneficiaries.
Previously, the Saudi Industrial and Development Fund (SIDF) launched a new SAR 105 billion fund to support promising new sectors and local manufacturing with renewable energy as one of the industries. The Saudi Authority for Industrial Cities and Technology Zones (Modon) in 2021 stated that 23 new factories are planned to come up in the country that will enhance its solar PV production capacity (see Saudi Arabia’s PV Production Plans).