Financial Feasibility of Energy-Efficient Local Content Development in Saudi Arabia’s Power Generation Industry: Opportunities for Sustainable Economic Growth under Vision 2030

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@article{1723056,
      author = {Muhammad Anas},
      title = {Financial Feasibility of Energy-Efficient Local Content Development in Saudi Arabia’s Power Generation Industry: Opportunities for Sustainable Economic Growth under Vision 2030},
      journal = {Iconic Research And Engineering Journals},
      year = {2026},
      volume = {10},
      number = {3},
      pages = {1451-1463},
      issn = {2456-8880},
      url = {https://www.irejournals.com/formatedpaper/1723056.pdf},
      abstract = {Saudi Arabia’s power-sector transition entails major challenges related to infrastructure, industrial development, and financing. Energy-efficient generation can improve lifecycle economics, while local content supports value retention, capability development, and economic development. However, these objectives may conflict. Mandatory or premature localisation can increase capital costs, reduce bankability, or introduce inefficiencies. In contrast, an exclusive focus on cost minimisation may constrain domestic learning and resilience. This review assesses the financial viability of integrating energy efficiency with local-content development in Saudi Arabia’s power generation sector under Vision 2030. A structured integrative review synthesises peer-reviewed evidence on generation economics, localisation, value chains, investment risk, project finance, and green finance. The evidence shows that effective localisation depends less on maximising local-content percentages and more on targeting value-chain segments where Saudi capabilities, demand, and quality systems are competitive. Energy efficiency improves feasibility by lowering operating costs and fuel exposure, increasing output, and strengthening debt-service capacity, but these benefits must be weighed against financing conditions and localisation premiums. Evidence indicates that local-content policies can increase short-term costs if requirements exceed domestic capability. However, enduring benefits arise when policies prioritise technologically adjacent industries, supplier learning, and exportable capabilities. This paper proposes a risk-adjusted, stage-gated framework linking technical efficiency, local value creation, and bankability. It concludes that Vision 2030 objectives are best achieved through adaptive localisation thresholds, performance-based procurement, credible revenue structures, supplier-development finance, and transparent lifecycle metrics, rather than uniform domestic-content mandates.},
      keywords = {energy efficiency; local content; project finance; power generation; Saudi Arabia; Vision 2030; financial feasibility; industrial policy},
      month = {September},
  }