Saudi Arabia’s sovereign wealth fund is nearing an agreement to buy about a 10 per cent stake in Acwa Power International ahead of an initial public offering by the Riyadh-based energy producer, said a report.

The Public Investment Fund (PIF) may sign an agreement with the power plant developer in the coming days, reported Bloomberg citing people with knowledge of the matter.

Talks are still ongoing and may not result in a deal, they said. It’s not immediately clear what valuation Acwa Power could get from the investment.

The PIF is also a major investor in some of the kingdom’s largest firms, including Saudi Telecom Company, Saudi Arabian Mining Company and National Commercial Bank.

It also took a 16.32 per cent stake in Almarai Company, the country’s biggest dairy producer, last year as the government supports national companies and develops them into regional and global leaders.

The potential investment from PIF comes at a time when Acwa Power is making plans to raise more than $1 billion from an IPO, people familiar with the matter said last month.

The share sale would be one of the first to allow so-called qualified foreign investors to participate in an IPO in the kingdom, stated the report.

Started in 2004, Acwa Power owns conventional power, renewable and water desalination assets across the Middle East, as well as projects in Vietnam and South Africa. It’s one of the largest electricity generation companies in the Middle East, both in conventional and renewable energy.