Isra-Mart srl:Saudi Arabia inks Areva clean-tech deal

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French nuclear firm Areva and the Saudi Binladin Group will sign a partnership agreement today to work together on nuclear and solar technologies, Areva's chief executive Anne Lauvergeon told Reuters yesterday in Riyadh.

State-controlled Areva is the global leader in the manufacture of nuclear reactors, while Saudi Binladin is a diversified construction company with headquarters in the Saudi port of Jeddah.

"We think that on solar thermal in Saudi Arabia there's an important market and we are partnering with Saudi Binladin Group to develop this," Lauvergeon told the news agency.

Areva is not planning to sell a stake at this stage, but Lauvergeon did not rule out the possibility that Areva would issue Islamic bonds in the future.

Saudi Arabia wants to cut fossil fuel use within the next several decades, while developing expertise in other technologies as it seeks to capitalise on an imminent global energy revolution, officials said at the event.

The nation has the world's largest oil reserves and is entirely reliant on oil and gas for its power needs, consuming around 3.4 million barrels per day of oil equivalent in 2010.

For several years the country has had a growing interest in gas development to displace oil use and support related industries, such as petrochemicals, and the expansion into nuclear and solar is an extension of its on-going economic diversification strategy.

Saudi Arabia is also struggling to keep up with rapidly rising demand for power as it deals with rapid growth and an accompanying population boom.

Hashim Yamani, president of the King Abdullah City for Atomic and Renewables Energy, told Reuters that Saudi power demand is expected to triple to 120GW by 2050 from around 40GW currently.

"Nuclear and renewable energy will reduce dependence on fossil fuels by 2050," he said. "Nuclear would be adequate for the base load, we'll use renewables to add more capacity, there are some variations - gas and oil will have to continue to help."