SoftBank-backed proposal may yield $250-300 mn for the construction major
Engineering and construction conglomerate Larsen & Toubro (L&T) is planning to bid for an EPC contract for a section of the $200 billion solar project in Saudi Arabia to be built with the backing of Japan’s SoftBank.
Confirming the development, R. Shankar Raman, CFO, L&T, told The Hindu, “These are billion dollar projects but we are not looking at building the entire project. Normally, these projects are done in consortium as they (Saudi Arabia) don’t give it to one contractor. “There will be [an] opportunity for us to do about $250 million -$300 million of the work order,” Mr. Raman said. Saudi Arabia’s Public Investment Fund and SoftBank signed a MoU in March to invest in building the world’s biggest solar power project in Saudi Arabia, a project expected to have the capacity to produce up to 200 gigawatts (GW) by 2030.
Asked about L&T’s competitiveness to bag such a project given that L&T had not done big solar projects in India, he said, “They (Saudi Arabia) are talking about [a] very large project. If you have to implement such a large project, you need capable people. Our advantage is that we know the market as we have operated there before and we have our resources there. It’s an area we understand technically so, obviously, we should be able to engineer, design and procure better. Ultimately, it will come down to if I we [are] competitive on price or not.”
Construction next year
The first two solar parks are expected to generate 7.2 GW and construction work is scheduled to begin by next year.
On the expected timeline for bagging the project, Mr. Raman said SoftBank was backing these investments but there was a bit of some pressure in the Saudi market so it was reasonable to expect it in 12 months.
L&T was also eyeing to build solar power plants in Oman and other countries in West Asia to overcomeimprove its a depleting order book from the region due to a slowdown in the region.
Oman is planning to add another 500-1000 MW of solar capacity in its bid to diversify fuel resources for power generation.