ACWA Power’s initial public offering in October marked a new chapter in
the expansion of Saudi Arabia’s renewable energy sector.
The company, which is 44.16% owned by the Public Investment Fund,
22.75% by Vision Investment, and 11.20% by Al Rajhi Holding post-IPO,
issued just over 85 million new shares at SAR 10 each, comprising
11.67% of its share capital.
The IPO was oversubscribed 250 times in a sign of the company’s
promising outlook.
ACWA Power, or the International Company for Water and Power
Projects, is a leading electricity and water provider, both in fossil fuel and
renewable technologies, in Saudi Arabia and a significant participant in
the power generation and water desalination industries in the countries
in which it operates.
The group has estimated market shares of 24%, 43%, 14%, 29%, 22%
and 23% in Saudi Arabia, Oman, the UAE, Bahrain, Jordan and
Uzbekistan, respectively, according to its prospectus
GREEN ADVOCATE
Around a third of the company’s power generation projects (including operating, under construction, and in advanced development) utilize renewable technologies (solar and wind), and another 44% use natural gas, so that approximately 77% of the gross power capacity of the group’s power generating projects utilise either renewable or low carbon sources.
All told, the group had a portfolio with a total estimated project cost of
over SAR 248 billion, comprising 64 power and/or desalinated water
projects, in 13 countries, with a mix of renewable energy and
conventional fuel projects.
In recent months, the company signed financing worth USD2 billion
with Natixis CIB to develop new projects in the region, including in
renewable and clean energy.
ACWA Power, which has committed to net-zero emission by 2050, sold
one of its four oil-fired assets this year, which is a testament to the
company’s commitment to remain at the forefront of energy transition.
The company gave up a 32% equity stake in Shuqaiq Water and
Electricity Company, an oil-fired asset, to reduce its carbon footprint.
In addition, the company also saw the financial close of the 1,500 MW
Sudair PV independent power projects in July, in which ACWA Power
holds a 35% equity stake. The project is in partnership with PIF and Saudi Aramco, which own 35% and 30% of the project, respectively.
ACWA also started work on the 300 MW first stage of the 900 MW
Shuaa Energy 3 PSC in July – the fifth phase of Dubai’s Mohammed bin
Rashid Al Maktoum Solar Park.
2060 GOALS
ACWA Power is part of a major initiative by the Saudi government to
reach a target of net-zero carbon emissions by 2060. The kingdom aims
to increase the share of renewable energy to 50% of the total energy
mix by 2030, while shale gas will account for the remaining 50%.
The kingdom also aims to provide a package of initiatives to boost the
Carbon Circular Economy, which will contribute to renewing the energy
mix and reducing its carbon emissions by 2060.
Saudi Arabia recently joined the Global Methane Pledge, which aims to
reduce methane emissions globally by 30% compared to the level of
emissions in 2020, in line with the goals set out by the Saudi Green Initiative
The Saudi Green Initiative aims to reduce more than 278 million tonnes per annum (mtpa) of carbon emissions by 2030, more than half of its
annual average emissions of 517 mtpa.
“The kingdom will plant 450 million trees and rehabilitate 8 million
hectares of degraded lands by 2030, reducing 200 million tonnes of
carbon emissions with additional initiatives to be announced in the years
to come. The transformation of Riyadh into one of the world’s most
sustainable cities is already underway,” according to the SGI.
Saudi Arabia also joined the Global Ocean Alliance, established the
Ocean Exploration Foundation, and announced a number of initiatives –
including a Global Center for Tourism Sustainability – as it accelerates
efforts to mitigate the impacts of climate change.
These combined initiatives will represent an investment of SAR 700
billion being spent to stimulate growth of the sustainable economy.
“The Saudi Green Initiative will provide huge investment opportunities
for the private sector, quality job opportunities for the next generation of
leaders in the kingdom and enhanced international relationships that will
have a positive impact on the region and the world,” according to SGI.