ACWA Power, Uzbekistan ink three key energy agreements worth $12bn

Uzbekistan’s Ministry of Energy and Saudi Arabia’s leading power generation company, ACWA Power have signed three major energy agreements, valued at $12bn.

These include a ‘Heads of Terms’ agreement to develop a 1.5 GW wind farm in the Karakalpakstan region of Uzbekistan, which will be the largest single onshore wind project in the world.

The second agreement covers a plan for investment in green hydrogen, in Uzbekistan, in collaboration with Air Products, a global leader in industrial gases.

The third is a $10bn Investment Cooperation Agreement (ICA) to jointly develop gas-to-power, renewable energy, and green hydrogen projects in Uzbekistan.

Azim Akhmedkhodjaev, First Deputy Minister of Energy of Uzbekistan, said: “Developing the largest onshore wind project in the world and agreeing to a separate $10bn ICA shows how seriously we take our overall energy security and our clean energy capacity.

“We have outstanding partners in ACWA Power, which is already implementing four energy projects in Uzbekistan, meaning these new ventures are based on a strong foundation of partnership and trust.”

Mohammad Abunayyan, chairman of ACWA Power, said: “Uzbekistan is at the forefront of energy transition in Central Asia, and these key agreements with the country’s Ministry of Investments & Foreign Trade and Ministry of Energy make Uzbekistan ACWA Power’s second-largest country for overall investment. We are proud to play a vital role in supporting the nation’s decarbonisation efforts, stemming from the strong international cooperation between Saudi Arabia and Uzbekistan under their visionary leadership.”

The 1.5GW Karakalpakstan wind project, located in north-western Uzbekistan, is expected to achieve a financial close by the end of 2023 and be fully commissioned by Q1 2026. When complete, it will contribute 19 per cent to Uzbekistan’s overall renewable energy goals. It will also power 1.65 million households and offset 2.4 million tonnes of carbon emissions per year.

Uzbekistan’s Ministry of Energy, ACWA Power, and Air Products are also planning an investment in green hydrogen generation. This agreement follows an MoU signed during the visit of a Saudi Arabian delegation to Uzbekistan in January 2021.

The ICA was signed between Uzbekistan’s Ministry of Energy, Ministry of Investment & Foreign Trade and ACWA Power. All parties will collaborate to develop projects in gas-to-power, wind, hydroelectric and green hydrogen projects valued at US$10bn over a five-year period, starting in 2023.

The partnership will also encompass human capital building and joint R&D.

The initiatives will materially contribute to Uzbekistan’s long-term strategy to diversify its energy mix, as it targets 8 GW and 12 GW of solar and wind capacity by 2026 and 2030, respectively.

In other news, ACWA Power reported that its consolidated net profit attributable to equity holders of the parent reached SAR542m with a year-on-year (YoY) increase of 21 per cent, powered by a higher operating profit before impairment loss and other expenses and other income.

Read: ACWA Power reports consolidated net profit of SAR542m in H1 2022, reflecting a 21% YoY rise