Saudi Arabia's The Red Sea Development Company (TRSDC) has signed its first major public-private partnership (PPP) utilities package with ACWA Power as part of its commitment for the 28,000km2 destination to be solely powered by renewable energy.

Described as a “significant step forward”, TRSDC revealed that the deal will be its highest-value contract to date, which will be led by ACWA Power to design, build, operate and transfer The Red Sea Project’s utilities infrastructure.

All of the utilities will be delivered under a single agreement, which includes the provision of renewable power, potable water, wastewater treatment, solid waste management and district cooling for the 16 hotels, international airport and infrastructure that make up phase one of the project.

The PPP agreement expects to generate up to 650,000 MWh of 100% renewable energy to supply the destination and other utility systems, whilst emitting zero carbon dioxide emissions.

Included in the package will also be the world’s largest battery storage facility of 1000MWh, which will allow the destination to remain completely off-grid and powered by renewables day and night.

TRSDC’s CEO, John Pagano, said the contract “pushes the boundaries” of what it means to be sustainable and investing heavily in renewables.

“This is a pivotal moment for us as we seek to build a new kind of tourism destination in Saudi Arabia, aligned with Vision 2030,” said Pagano. “This contract also signifies a noteworthy step change for us as the consortium brings foreign investment to the project, demonstrating international support and confidence for the vision that is becoming a reality along the Red Sea coast.”

The ACWA Power consortium is financed by Saudi and international banks, including the UK’s Standard Chartered Bank and China’s Silk Road Fund.

Commenting on the PPP package, ACWA Power’s chairman, Mohammad Abunayyan, said being selected to support the TRSDC project marks another milestone in its bid win trajectory.

“Powering the Red Sea Project and all utility services exclusively with clean, renewable energy sources is a commendable strategy, and enabling it through a public-private partnership contract underlines TRSDC’s groundbreaking approach which sets a new benchmark in sustainability and environmental stewardship,” said Abunayyan.

The Red Sea Project remains on track to welcome the first guests by the end of 2022, when the international airport and the first four hotels will open. The remaining 12 hotels scheduled for completion in Phase One will open in 2023.

Upon completion in 2030, there will be 50 hotels, offering up to 8,000 hotel rooms, and around 1,300 residential properties across 22 islands and six inland sites.