Riyadh Cement Company has signed a 25-year agreement to buy solar-generated electricity from Samana Energy, a deal that costs the cement maker nothing to build and, the company says, less than what it currently pays for power. The arrangement, disclosed to the Saudi stock exchange Tadawul, is a bet that Saudi Arabia’s energy-intensive industries can cut both costs and carbon without capital investment, a model increasingly popular among manufacturers racing to meet the kingdom’s Vision 2030 sustainability targets.
Under the agreement, Samana Energy will finance, build, and operate a solar power generation system dedicated to Riyadh Cement’s operations. Riyadh Cement will pay only for the electricity it consumes, with average annual payments expected around SAR 6 million, roughly $1.6 million, excluding VAT, over the contract’s quarter-century term. The system is expected to begin commercial operations in the fourth quarter of 2027, pending regulatory approvals, with cost savings emerging gradually from its first year online.
A Financing Model Built for Heavy Industry
For a cement producer, whose plants run continuously and consume vast amounts of electricity, the appeal is straightforward. There is no capital expenditure, no operating risk, and electricity priced below what the company currently pays, both for its own generation and for supply from Saudi Energy Company. Riyadh Cement noted that actual savings will depend on energy prices at the time of consumption, a caveat that underscores how the deal, structurally, shifts nearly all execution and financing risk onto the solar developer.
That structure, known broadly as a power purchase agreement, has become the preferred vehicle for corporate solar adoption in Saudi Arabia, letting manufacturers decarbonize operations without diverting funds from core production. It also reflects a maturing local solar-financing market, one no longer reserved for utility-scale government tenders but now reaching mid-size industrial buyers directly.
Samana’s Bet on Industrial Rooftops and Land
Samana Energy was formed in October 2024 as a joint venture between Al Muhaidib Group, a diversified Saudi investment group, and Group AMANA, a regional design-build contractor. The company positions itself as an independent power producer focused on commercial and industrial solar, financing, building, and operating projects for logistics facilities, cold storage, data centers, and manufacturers seeking to cut reliance on the national grid or on-site fuel generation. The Riyadh Cement agreement is among its most significant industrial contracts to date, and it signals the venture’s push from smaller rooftop installations toward larger, dedicated solar systems for heavy manufacturing.
A Cement Maker Positioned for Vision 2030’s Buildout
Riyadh Cement, listed on Tadawul as one of Saudi Arabia’s leading white and grey cement producers, has leaned into the kingdom’s construction boom. Chief executive Shoeil Al Ayed said the company’s market share has remained stable at 6.3 percent, as the company maintains a strong market position, with its sales portfolio well-balanced and strategically targeted toward the kingdom’s key projects. “Thirty-five percent is allocated to housing projects and 65 percent to major developments such as Qiddiya, King Salman Park, and Diriyah Gate,” Al Ayed said, adding that the company is well-positioned to benefit from ongoing public and private investment under Vision 2030, since its plants sit near major projects in the Riyadh region.
The solar agreement arrived alongside two other contracts Riyadh Cement signed in the same period, a $14.9 million, 24-month digitalization deal with Tianjin Cement Industry Design and Research Institute to apply automation, artificial intelligence, and predictive maintenance across its production lines, and a smaller logistics-automation contract with the Portuguese firm Cachapuz. Together, the three deals suggest a company modernizing on two fronts at once, digitizing its factory floor while decarbonizing its power supply, without financing either shift through new debt.
A Template for Gulf Manufacturing
Cement production is among the most carbon-intensive industrial processes in the world, and Gulf manufacturers have faced growing pressure to show progress toward Vision 2030’s target of generating half of Saudi Arabia’s electricity from renewable sources by 2030. Riyadh Cement’s approach, pairing a zero-capital solar contract with a broader digital transformation push, offers a template other Saudi industrial companies are likely to study as more independent power producers compete for similar long-term agreements. If the deal performs as structured, the more significant story may not be the megawatts of solar power added to Riyadh’s grid, but the financing model that got them there.
