Chinese solar firms, Saudi entities to invest $3 billion in production ventures

Two Chinese solar panel manufacturers are partnering with Saudi Arabian companies to establish production facilities in Saudi Arabia, with a total planned investment of approximately $3 billion.

Solar module maker TCL Zhonghuan Renewable Energy Technology announced it would form a joint venture with a unit of the Saudi sovereign wealth fund, Public Investment Fund (PIF), and Vision Industries, a Riyadh-based renewable energy company, to develop a silicon-wafer manufacturing facility, Caliber.Az reports citing foreign media.

The total investment for this project is about $2.08 billion.

Separately, Chinese solar module giant Jinko Solar disclosed its plans to form another joint venture with the same Saudi entities. This venture will set up a facility to produce solar cells and modules, with a total investment of 3.69 billion Saudi Arabian riyals ($983.8 million).

These deals come as Chinese solar module makers face challenges of high inventory and overcapacity, along with concerns over potential new tariffs on U.S. imports of solar modules.

In May, the U.S. Department of Commerce launched an anti-dumping investigation into imports of silicon photovoltaic cells from Cambodia, Malaysia, Thailand, and Vietnam, where Chinese solar companies have significant manufacturing operations.

The Middle East has become an attractive market for Chinese alternative-energy companies seeking to boost sales and alleviate domestic overcapacity. Saudi Arabia has emerged as a key player, driven by its efforts to localize solar panel production and expand renewable energy. China's exports of solar modules to the Middle East rose 27% in 2023, with Saudi Arabia ranking among the top three importers of Chinese solar modules in May, according to solar research firm InfoLink Consulting.