Siemens and Saudi Arabia's Desert Technologies join forces to develop solar projects

Capton Energy will invest in initiatives with an aggregate capacity of more than one gigawatt

Capton Energy plans to invest in existing and greenfield solar power projects which have a power generation capacity of 20 to 100 megawatts. Photo: Siemens

German industrial conglomerate Siemens and Saudi Arabia's Desert Technologies formed a joint venture to develop and invest in solar energy and smart infrastructure projects across the Middle East, Africa and Asia.

The platform, called Capton Energy, aims to build a portfolio of investments in projects with an aggregate capacity of more than 1 gigawatt, the companies said on Tuesday.

The company plans to invest in existing and greenfield solar power projects, which have a power generation capacity of 20 megawatts to 100MW.

“Solar power plays a critical part in the global energy transition,” said Steffen Grosse, head of equity finance for Siemens Financial Services (SFS).

“The launch of Capton sets the stage to help drive the expansion of more sustainable and flexible energy systems across the Middle East, Africa and parts of Asia.”

Solar energy has benefitted on one end from declining costs, making the technology competitive, and on the other end from ambitious net-zero targets set by countries, accelerating its adoption.

The world added more than 260 gigawatts of renewable energy capacity in 2020, exceeding 2019 figures by about 50 per cent, according to the International Renewable Energy Agency.

More than 80 per cent of all new electricity capacity was renewable, with solar and wind accounting for 91 per cent, Irena said.

Regionally, crude-exporting countries are increasingly turning to renewables to slash emissions and diversify their energy sources.

Saudi Arabia, the world's largest oil exporter, plans to invest more than $100 billion in renewable energy projects, it announced in December.

The UAE is investing $163bn in its Energy Strategy 2050, which targets an energy mix that will focus on clean and renewable sources.

Capton Energy will benefit from its partners’ ability to supply technology and expertise to help develop new solar plants. The platform will also offer third-party investors the ability to participate in the energy transition journey, the companies said.

SFS and Desert Technologies will be joint shareholders in Capton, which will be based in Dubai.

Desert Technologies is a solar PV and smart infrastructure holding company, which manufactures products at its 110MW-capacity factory in Jeddah. The company has completed more than 40 solar projects in 22 countries.

“Capton Energy is already advanced in assembling a pipeline of solar-themed investments and is in progressive discussions to launch the inaugural fund raising,” said Umer Ahmad, Capton Energy's chief executive and chief investment officer.

“With Siemens and Desert Technologies as strategic partners … we are confident that we have the complete toolkit to bring an optimum blend of development, investment and technological capabilities, so we can meet the growing needs for solar energy in our target markets.”