Pinion Newswire
Record 1.3¢ per kilowatt hour at Saudi Arabia’s 1,500 MW Dawadmi project sets a live pricing marker under a 25-year PPA, supported by 839.0 million dollars build cost, 1.5 billion dollars projected sales and 244.0 million dollars dividends; a 4,500 MW slate above 2.4 billion dollars advances a 50% renewables goal by 2030 and refocuses models on duration, cost of capital and risk transfer.
Investors seeking dependable income streams receive a current benchmark as KEPCO secures the Dawadmi award near Riyadh with a 1.3¢ per kilowatt hour tariff under a 25-year agreement, and Merifund Capital Management positions the pricing as a decisive signal for how offtake quality, scale and competitive procurement compress required returns without compromising bankability or lender protections. Anthony Saunders, Director of Private Equity at Merifund Capital Management Pte. Ltd., characterises the outcome as “a contracted tariff at this level, paired with credible offtake and scale, narrowing discount rates and reframing duration risk for core infrastructure allocators”.
Financial contours that matter to long only and alternatives mandates are unmistakable, with the Build Own Operate structure aligning construction discipline to long term operations and the revenue stack strengthened by visibility across the asset life; the project’s economics include an estimated build of $839 million, aggregate sales guidance around $1.5 billion and dividend capacity indicated at $244 million, numbers that focus underwriting on availability, curtailment and maintenance strategy rather than solely on headline yield. Merifund Capital Management’s analysis points to a feedthrough into valuation frameworks for markets that couple predictable procurement with strong wind resources, and Saunders notes that “pricing at 1.3¢ becomes a practical comp that informs bids, exit yields and underwriting assumptions wherever sponsors can rely on transparent tenders and stable regulation”.
Market context further supports the investor lens, as Saudi Arabia’s renewable programme continues to clear large volumes with competitive pricing across technologies, including a solar reference point near 1.1¢ per kilowatt hour at Najran that confirms the trend toward lower levelised costs in resource rich geographies and creates portfolio construction options for managers balancing inflation resilience with duration. The combination of repeated auctions, standardised documentation and the presence of a centralised buyer is expanding the investable universe for institutions that prioritise cash flow certainty and governance consistency.
Capital structure and risk allocation evolve in step with sponsor and lender expectations, with limited recourse debt keeping repayment anchored to project revenues, equity bridge facilities enabling efficient capital staging during construction, and vendor warranties placing technology and construction exposures with specialists; these features support headline tariffs while preserving the covenant and reporting disciplines that large asset owners require for infrastructure mandates. The depth of data and procurement transparency reduces variance in production forecasts, which in turn stabilises base case valuations and strengthens confidence in distribution profiles.
Strategic posture from the sponsor community also warrants attention, as KEPCO treats Dawadmi as a platform for additional utility scale renewables and supports international expansion with substantial network investment of $50.2 billion through 2038, a figure that underscores the scale of grid reinforcement necessary to integrate variable generation and that sharpens focus on ancillary opportunities across transmission, system stability and flexibility services. Portfolio managers benchmarking potential co investments or secondary acquisitions may therefore consider not only asset level returns but also the broader infrastructure cycle that accompanies large renewable deployments.
The immediate implication for asset allocation is unambiguous, as Merifund Capital Management’s analysis indicates that a clearing price at 1.3¢ under a 25-year agreement moves the outer boundary of what investors can underwrite when procurement delivers visibility and when resource quality supports high-capacity factors, prompting managers to re-test discount rates, revisit exit yield assumptions and reassess how they price operating leverage in maintenance and performance regimes. Saunders frames the practical takeaway succinctly, observing that “the Dawadmi result is not a universal template, yet it sets the current frontier where exceptional resources and disciplined procurement converge, and it will shape how institutional capital prices risk in comparable tenders”.
About Merifund Capital Management
Established in 2010, Merifund Capital Management Pte. Ltd. UEN 201024554E is a Singapore‑headquartered investment manager with a focus on rigorous capital preservation, liquidity and prudent risk management across traditional long‑only mandates, long and short equity, global macro, event‑driven and systematic trading strategies. The firm uses derivatives selectively to optimise opportunity capture while maintaining disciplined controls, integrates environmental, social and governance considerations into research and portfolio construction to align with robust global sustainability standards, and serves accredited investors, family offices, foundations and endowments while preparing to broaden access to retail investors. Further insights are available at https://merifund.com/insights, and media enquiries can be directed to Tao Yang at media@merifund.com or through https://merifund.com.
Pinion Newswire
