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Abu Dhabi, UAEFriday 19 October 2018

Saudi Arabia’s sovereign wealth fund increases stake in Acwa Power

The fund previously held around 9.8 per cent shareholding in the company through one of its subsidiaries

A Saudi Acwa Power-generating windmill is pictured in Jbel Sendouq, on the outskirts of Tangier, Morocco. Saudi Arabia’s sovereign wealth fund has increased its stake in Acwa Power. 
A Saudi Acwa Power-generating windmill is pictured in Jbel Sendouq, on the outskirts of Tangier, Morocco. Saudi Arabia’s sovereign wealth fund has increased its stake in Acwa Power. 

Saudi Arabia’s sovereign Public Investment Fund has increased its stake in Riyadh-based renewables developer Acwa Power, the companies said in an statement.

PIF’s total stake in Acwa Power is now close to 25 per cent, with its latest 15.2 per cent direct stake in addition to its existing 9.78 per cent stake through its wholly-owned subsidiary Sanabil Direct Investments Company, the firms said in a statement on Thursday. Acwa Power’s chairman Mohammad Abunayyan confirmed that PIF’s offer was made in early 2017.

“The PIF reinforces what is already a high-quality institutional shareholder base which includes the Public Pension Agency of Saudi Arabia and World Bank’s International Finance Corporation,” Mr Abunayyan said.

The investment by the Saudi sovereign fund in one of the largest regional renewables developer comes amid a rollout of a renewables programme by the world’s biggest oil exporter. Saudi Arabia is expected to tender over 4GW of solar and wind projects as it looks to free up more crude for export and diversify its economy further.

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PIF’s investment will come in the form of a capital increase, with the proceeds to be spent on Acwa Power’s growth strategy and investment plans, the companies said.

HSBC advised PIF on the deal, while JP Morgan acted as the sole financial advisor for the renewables firm.

Acwa Power has developed projects across the Middle East, including the fourth phase of the Shaikh Mohammed bin Rashid Solar Park, as well as renewables schemes in Jordan. The company is also taking a leading role in the alternative power generation sector in Saudi Arabia as well.

An Acwa Power-led consortium was chosen to develop Saudi Arabia’s first-ever solar plant, a $302 million facility at Sakaka, which is being developed on the basis of an independent power producer model.

The developer is also bidding for the kingdom’s first wind project, a 400MW scheme in the northern Dumat Al Jandal region.