ACWA Power, Kazakhstan to develop key 1GW wind energy and battery storage project

Saudi Arabia’s ACWA Power has signed a key partnership agreement with Kazakhstan’s Ministry of Energy and Samruk-Kazyna, the sovereign wealth fund of Kazakhstan.

The deal will see the company lead and develop a 1GW wind energy and battery storage project in the Central Asian country.

As a developer, investor, and operator of power generation, water desalination and green hydrogen plants, the project marks ACWA Power’s entry into Kazakhstan, with an initial investment of $1.5bn.

The company’s involvement will represent the biggest Saudi investment in Kazakhstan’s power sector to date, with wind turbines and battery storage to ensure the involved parties capitalise on emissions abatement and energy transition opportunities.

Kazakhstan 2050 Strategy

The agreement is in line with the Kazakhstan 2050 Strategy, which defines the course for long-term economic development and is aimed at placing the nation among the top 30 global economies by 2050.

Sustainability is a key priority, and the focus is to meet 50 per cent of its energy requirements via alternative and green energy technologies by 2050. The country is fast-tracking a number of clean energy initiatives to achieve set targets.

The agreement with ACWA Power aims to support national climate action, renewables integration, and sustainable development efforts through innovation and technology integration.

It is intended to successfully decarbonise fossil fuel-based power generation following its scheduled completion in 2027.

ACWA Power’s diversification efforts

Mohammad Abunayyan chairman, ACWA Power, said: “The signing today once again exemplifies our commitment to partnering nations in their diversification endeavours and enabling sustainable progress. Public-private partnerships are indeed key to facilitating the energy transition reliably and responsibly.

“And given the republic’s values and emphasis surrounding decarbonisation, we are delighted to expand our operations into the Kazakhstani market and support its government in reaching essential renewable energy targets.”

In February, the company expanded its Indonesian portfolio by signing an MoU for the development of a gigascale green hydrogen project, with Pupuk Indonesia (PI), Indonesia’s state-owned, largest offtaker of ammonia in the region.

ACWA Power expands its Indonesian portfolio by signing an MoU for the development of a gigascale green hydrogen project, with Pupuk Indonesia (PI), Indonesia’s state-owned, largest offtaker of ammonia in the region,
It was signed by PI President and Group CEO, Bakir Pasaman pic.twitter.com/gUv8qznQhS

— ACWA Power-Accelerating Energy Transition Globally (@ACWAPower) February 22, 2023

In other developments, the company will receive support from the kingdom’s Shareek programme for the construction of the world’s largest green hydrogen plant, which is being developed in partnership with NEOM Green Hydrogen Company and Air Products Qudra.

Read: Aramco, ACWA Power, SABIC to receive support from Saudi’s Shareek programme

The Shareek programme aims to unlock SAR5tn in domestic private sector investments by 2030 and contribute to the goals set out in Vision 2030, which target an increase in private sector GDP contribution to 65 per cent and an increase non-oil exports from 16 to 50 per cent.

ACWA Power also recently posted robust growth in all its key financial performance indicators in a year still experiencing aftershocks of the Covid pandemic, the Russia-Ukraine crisis fuelling rampant inflation, restricted supply chains and a rising interest rate environment.

The highlights included operating income before impairment loss and other expenses for the year ended December 31  2022 was SAR2,614m, a 14 per cent, or SAR311m increase compared to the previous year (SAR2,303).

This result reflected the full year impact of projects completed throughout 2021 in addition to new contribution from projects completed throughout the current year.

The results were further supported by higher contribution from development and construction management services for projects that had achieved financial close status during the year.

Furthermore, the company’s adjusted net profit, after excluding the impact of non-routine, unusual or non-operational items, reached SAR1,575m, growing by 32 per cent versus SAR1,194m of 2021.

Consolidated net profit, attributable to equity holders of the parent company was SAR1,540m for 2022, representing a 103 per cent or SAR781m increase, when compared to the previous year (SAR759m), delivering SAR2.11 earnings per share.