Saudi Arabia's Public Investment Fund (PIF) has acquired a significant stake in the International Company For Water And Power Projects (Acwa Power), a leading developer, owner, and operator of power generation and water desalination plants.

 

As a result of the investment, PIF will become a 15.2 per cent direct shareholder in Acwa Power and, by taking into account the 9.78 per cent ownership of its wholly-owned subsidiary Sanabil Direct Investments Company, PIF’s total shareholding directly and indirectly represents a 24.98 per cent equity interest in Acwa Power, a statement said.

 

The entire investment will be in the form of a capital increase and the proceeds will be used to support Acwa Power's strategy and investment plan.

 

Since its formation in 2004, Acwa Power has been a notable Saudi success story, becoming a leading private sector power and desalinated water developer and producer in the kingdom in addition to rapid expansion into new markets. In Saudi Arabia, with 54 per cent of the Acwa Power’s gross power generation capacity and 93 per cent of its gross water desalination capacity, the company is able to provide 14 per cent and 33 per cent of the power and desalinated water consumption in the kingdom, respectively, it said.

 

Now also firmly established in geographies beyond Saudi Arabia, Acwa Power has a total of 40 power and/or desalination projects in operation and under construction, and an additional 7 power and/or desalination projects in advanced development.  

 

The investment is in line with the Pubic Investment Fund Program, to unlock new sectors and industries, to support and accelerate the development of innovative Saudi businesses and achieve strong long-term returns. It also underlines the strategic support PIF has provided to ACWA Power in funding its growth and PIF’s role in unlocking the broader sector as a significant investor in a number of utilities businesses, the statement said.

 

Acwa Power also has a track record of innovation in renewable energy, recently achieving the lowest contracted solar tariff in the world for the 300MW Sakaka PV project (US cents 2.3417/kWh), the first-ever utility scale solar power project in Saudi Arabia.

 

Commenting on the investment, the Public Investment Fund said: “We see exciting growth potential for Acwa Power and are very pleased to support its development. ACWA Power is a strategic long-term investment for PIF which has a proven asset base and demonstrated track record of leading innovative projects domestically and internationally.”

 

Mohammad Abunayyan, chairman of ACWA Power, commented: “I am delighted to welcome the PIF in its own capacity as a significant shareholder of Acwa Power culminating a process where the offer was received in early 2017. Their endorsement underlines the central role we play in the Saudi economy and our successful international expansion all geared towards achieving the objectives of Vision 2030." 

 

Paddy Padmanathan, chief executive officer of Acwa Power, said: “The investment by PIF reflects its commitment to the Kingdom of Saudi Arabia’s energy transition plans of diversification of the fuel mix in power generation including the introduction of significant renewable energy capacity and the expansion of much needed additional power generation and desalinated water production capacity. While Acwa Power will continue to focus on reliably delivering electricity and desalinated water at the lowest cost, the Acwa Power also intends to leverage its domestic and international market-leading position to play a pivotal role in the Kingdom of Saudi Arabia’s energy transition plan, as evidenced by its recent successful bid for the Kingdom of Saudi Arabia’s first utility scale solar photovoltaics tender in the Kingdom of Saudi Arabia in February 2018.”  

 

HSBC acted as the sole financial advisor to PIF and JP Morgan acted as the sole financial advisor to Acwa Power on the transaction. - TradeArabia News Service