To Reward or Not to Reward? Stock Market Reaction to Renewable-Energy Project Awards

This study investigates whether equity markets in a hydrocarbon-based emerging economy react to corporate participation in large-scale renewable-energy investments. Focusing on Saudi Arabia’s National Renewable Energy Program (NREP) during 2017–2024, we examine stock market responses to public announcements of utility-scale solar and wind project awards involving listed firms. Using an event-study design, we analyze cumulative abnormal returns (CARs) for 42 firm–event observations linked to 21 projects. Expected returns are estimated using the market model, with robustness checks based on market-adjusted and CAPM specifications incorporating the Saudi Interbank Offered Rate (SAIBOR) as the risk-free rate. The results show statistically significant abnormal returns around award announcements, with stronger effects in short event windows. Cross-sectional analyses indicate that market reactions are more pronounced for domestic Saudi firms and increase with project size, suggesting that institutional context and project salience shape investor responses. Overall, the findings provide evidence that renewable project awards are valuation-relevant events in Saudi Arabia’s capital market and contribute to the event-study and green-finance literature in a hydrocarbon-dependent economy undergoing transition under Vision 2030.