Copyright Markets Insider
Singapore, Singapore, November 11th, 2025, FinanceWire Merifund Capital Management Pte. Ltd. today announced that the record-low 1.3 ¢ per kilowatt-hour tariff secured by KEPCO at Saudi Arabia’s 1,500 MW Dawadmi renewable-energy project marks a live global benchmark for contracted power pricing and long-duration yield strategies. The award, structured under a 25-year Power Purchase Agreement (PPA) and backed by a $839 million build cost, $1.5 billion projected sales, and $244 million dividend capacity, establishes a new pricing frontier that redefines cost-of-capital assumptions and risk-transfer models across the infrastructure investment landscape. Institutional investors now have a fresh pricing reference point as KEPCO secures the Dawadmi secures the Dawadmi award near Riyadh with a 1.3¢ per kilowatt hour tariff under a 25-year agreement, and Merifund Capital Management positions the pricing as a decisive signal for how offtake quality, scale, and competitive procurement compress required returns without compromising bankability or lender protections. Anthony Saunders, Director of Private Equity at Merifund Capital Management Pte. Ltd., characterises the outcome as “a contracted tariff at this level, paired with credible offtake and scale, narrowing discount rates and reframing duration risk for core infrastructure allocators”. Key financial characteristics relevant to long-only and alternative mandates are evident, with the Build Own Operate structure aligning construction discipline to long term operations and the revenue stack strengthened by visibility across the asset life; the project’s economics include an estimated build of $839 million, aggregate sales guidance around $1.5 billion and dividend capacity indicated at $244 million, numbers that focus underwriting on availability, curtailment and maintenance strategy rather than solely on headline yield. Merifund Capital Management’s analysis points to a feedthrough into valuation frameworks for markets that couple predictable procurement with strong wind resources, and Saunders notes that “pricing at 1.3¢ becomes a practical comp that informs bids, exit yields and underwriting assumptions wherever sponsors can rely on transparent tenders and stable regulation”. Market context further supports the investor lens, as Saudi Arabia’s renewable programme continues to clear large volumes with competitive pricing across technologies, including a solar reference point near 1.1¢ per kilowatt hour at Najran that confirms the trend toward lower levelised costs in resource-rich geographies and creates portfolio construction options for managers balancing inflation resilience with duration. The combination of repeated auctions, standardised documentation, and the presence of a centralised buyer is expanding the investable universe for institutions that prioritise cash flow certainty and governance consistency. Capital structure and risk allocation evolve in step with sponsor and lender expectations, with limited recourse debt keeping repayment anchored to project revenues, equity bridge facilities enabling efficient capital staging during construction, and vendor warranties placing technology and construction exposures with specialists; these features support headline tariffs while preserving the covenant and reporting disciplines that large asset owners require for infrastructure mandates. The depth of data and procurement transparency reduces variance in production forecasts, which in turn stabilises base case valuations and strengthens confidence in distribution profiles. Strategic positioning within the sponsor community is also noteworthy, as KEPCO treats Dawadmi as a platform for additional utility scale renewables and supports international expansion with substantial network investment of $50.2 billion through 2038, a figure that underscores the scale of grid reinforcement necessary to integrate variable generation and that sharpens focus on ancillary opportunities across transmission, system stability, and flexibility services. For portfolio managers reviewing potential co-investments or secondary acquisitions, the Dawadmi development illustrates how large-scale renewable projects are increasingly connected to the broader infrastructure cycle that supports grid modernization and energy transition objectives. The immediate implication for asset allocation is clear, as Merifund Capital Management’s analysis suggests that a long-term agreement at a notably low clearing price redefines the upper limits of what investors may underwrite when procurement provides transparency and resource quality enables high-capacity factors. This development prompts managers to re-evaluate discount rates, revisit exit yield assumptions, and reconsider how operating leverage is priced within maintenance and performance frameworks. Saunders frames the practical takeaway succinctly, observing that “the Dawadmi result is not a universal template, yet it sets the current frontier where exceptional resources and disciplined procurement converge, and it will shape how institutional capital prices risk in comparable tenders”. About Merifund Capital Management Established in 2010, Merifund Capital Management Pte. Ltd. UEN 201024554E is a Singapore‑headquartered investment manager with a focus on rigorous capital preservation, liquidity, and prudent risk management across traditional long‑only mandates, long and short equity, global macro, event‑driven, and systematic trading strategies. The firm uses derivatives selectively to optimise opportunity capture while maintaining disciplined controls, integrates environmental, social, and governance considerations into research and portfolio construction to align with robust global sustainability standards, and serves accredited investors, family offices, foundations, and endowments while preparing to broaden access to retail investors. Further insights are available at https://merifund.com/insights, and media enquiries can be directed to Tao Yang at media@merifund.com or through https://merifund.com. Contact Tao Yang
