Saudi Arabia has been diversifying its economy through serious reforms to keep the country afloat as global oil prices plummet. One of the main changes local officials have made in recent years is the development of renewable energy sources in the country.
Currently, less than 1 percent of Saudi Arabia's energy is renewable, with nearly all of the kingdom's domestic power coming from oil production; recently, things seem to be slowly transforming. From investing tens of billions in the field to launching projects aimed at advancing it in the kingdom, Saudis seem to be adamant in their bid to shift from depending on finite energy sources.
Earlier this week, the country announced it will be offering monetary loans to fund renewable energy projects. On Sunday, the Saudi Industrial Development Fund (SIDF) officially opened applications for a program called "Mutjadeda" through which it will be offering loans totaling up to 1.2 billion riyals (almost $319 million).
The fund is a sign of how much Saudi Arabia wants to support this sector
Approval for loans depends on the applying company's ownership; the plan generally targets renewable energy component manufacturers in addition to independent production projects. The fund will not be limited to firms within the sector but will also finance companies in other fields that are interested in using renewable energy.
"Whether you're in manufacturing, agriculture or retail, if you want to deploy renewable energy, we will finance it," the fund's director-general said.
SIDF's Vice President of risk management, Ahmed Al-Gwaiz, explained that the vision behind the project is "to find new sources of energy to be less dependent on oil and to enable the manufacturing sector to continue its progress."
The executive added that the loans will be available for both Saudi and foreign-owned companies on condition that they are based in the kingdom. He stressed that the fund's officials have already conducted discussions with large retailers and agriculture producers interested in using renewable energy.
Established in the 1970s, SIDF has been playing the most vital role in its history under Crown Prince Mohammed bin Salman.
"In January, the government raised the fund's capital by about 60%. Its mandate was also recently expanded to allow the financing of energy, logistics and mining projects in addition to manufacturing ones," Bloomberg reported.
The government body is seen as a vital part of the country's Vision 2030, an ambitious blueprint leading the kingdom into an era beyond oil dependency.
Will the kingdom's focus on renewable energy change its outlook on climate change?
Though the kingdom is moving towards establishing renewable energy sources, it's still being criticized for neglecting the battle against climate change.
Earlier this year, the Climate Change Performance Index (CCPI) - which breaks down the efforts of 60 different countries in the fight against climate change - ranked Saudi Arabia at the bottom of its list. The kingdom scored 8 out of 100 on the index and was outranked by several other Arab nations including Morocco — which ranked fourth on the list.
The ranking emerged at a time when the kingdom announced that 10 percent of its electricity will come from renewable energy sources by 2030. However, despite its efforts, local officials have yet to adopt emission reduction targets.