Saudi Arabia’s sovereign wealth fund will develop the bulk of the kingdom’s proposed renewable power projects, turning it into one of the region’s biggest utility investors.

The Public Investment Fund will be responsible for developing 70 percent of the kingdom’s renewable power capacity, Saudi Energy Minister Khalid Al-Falih said in a speech in Abu Dhabi. The rest will be tendered by the ministry.

Saudi Arabia is revamping its domestic power industry by adding natural-gas fired and renewable power plants so...