France’s Engie eyes growth plans to expand Saudi operations: CEO

France-headquartered Engie is looking to double its investment in Saudi Arabia by an additional $5 billion and increase its local workforce to more than 3,000 employees in the next 3 to 5 years as the utilities provider chalks its ambitious plans for the Kingdom.

“We have great ambitions for Saudi Arabia and we will utilize our global expertise of 160,000 employees and operations in 70 countries to ensure the highest quality of service,” Engie’s KSA chief executive, Turki Al Shehri, told Argaam in an interview.

Currently, Engie generates 7.6 gigawatts (GW) of electricity, 800,000 cubic meters (cu/m) of water, and 9,220 gigajoule per hour (GJ/h) of industrialized process steam in Saudi Arabia.

Moreover, the firm caters to services segments such as energy research and development (R&D), technical consulting, energy efficiency, facility management, refrigeration, ventilation, and smart street lighting.

Meanwhile as the world grapples with the economic fallouts of the ongoing COVID-19 pandemic, several utilities and renewable energy firms have altered their business practices and developed strategies to counter the disruption.

With a portfolio of $5 billion and over 2,000 employees in Saudi Arabia, Engie has also restructured its workforce, availed backup shifts and postponed all maintenance shutdowns to minimize the COVID-19 impact.

The company’s local facilities are capable of undergoing a 2-month lockdown period without shutting or slowing down operations, Al Shehri mentioned.

“[About] 10% of the power and 11% of the water produced in Saudi Arabia are by ENGIE developments. Therefore, it is very critical that we continue to provide power and water at maximum levels,” he said.

Growing utilities business

Engie is working with Saudi Water Partnerships Company (SWPC) on the Yanbu-4 independent water production (IWP) project, which will provide 450,000 cu/m of desalinated water to the western region.

“We are currently working on the financial close, which once signed, will initiate construction with a planned commercial operation date of Q1 2023,” Al Shehri said.

The renewables sector is witnessing an exponential growth globally, as well as in Saudi Arabia. The government’s Renewable Energy Project Development Office (REPDO) released 3.7 GW of renewable projects in the last 3 years. The National Energy Services Company (Tarshid), as part of its energy efficiency program, will also begin to increase the usage of solar rooftop panels.

However, Al Shehri believes that the growth prospect for renewables in the private sector is yet to be realized. “The first movers will be the agriculture sector with vast available land and land owners willing to lease their plots,” he added.

The global market situation will lead private enterprises in future to aim for reducing operational costs, and solar power can help them by supplying cheap electricity. However, Al Shehri said the usage of rooftop solar panels is not competitive yet due to its high cost of installation.

“Today, the cost for ground-mounted solar to displace liquid fuel and grid-connected utility prices can be achieved at nearly half the price. Therefore, the drive is strictly economics based,” he pointed out.

“Despite the fact that utility tariff rates for the commercial sector are twice that of the industrial and agriculture sector, solar rooftop remains to be uneconomical,” the CEO added.

Nonetheless, Al Shehri expected the rooftop solar market to grow as panel prices drop in the near-term.

Write to Paromita Dey at paromita.d@argaam.com