Saudi's ACWA Power sees $4.5bn in local project tenders
Now Reading
Saudi’s ACWA Power sees $4.5bn in local project tenders

Saudi’s ACWA Power sees $4.5bn in local project tenders

Saudi Arabia wants to diversify its energy mix by using renewables

Avatar

Saudi Arabian utility developer ACWA Power expects to submit tenders for projects this year worth $4.5bn in Saudi Arabia and will also target projects in Morocco and the United Arab Emirates, its chief executive said.

ACWA Power CEO Paddy Padmanathan also confirmed the developer of electricity and water projects in the Middle East, Africa and Southeast Asia has shortlisted banks to arrange an initial public offering (IPO).

He declined to name the banks or give a timeframe for an IPO. The company is looking to sell a 30 per cent stake to investors and list in Riyadh, banking sources have told Reuters. An IPO is expected by the end of the year.

“We are expecting to see a lot of projects here in Saudi. We are targeting 50 to 60 per cent of the total,” Padmanathan told Reuters in an interview at ACWA Power’s headquarters in Riyadh.

Elsewhere, the company expects tenders for around $2.5bn worth of projects in Morocco and $3.5bn of projects in the United Arab Emirates.

Saudi Arabia wants to diversify its energy mix by using renewables, for example, and by partnering with the private sector. The ministry of energy’s government renewable office plans to tender 3,200 megawatt (MW) of solar photovoltaic projects and 800MW of wind projects.

ACWA will take part in the tender for a 400MW wind plant in March, Padmanathan said, and will also tender for the Rabigh 3 desalination plant, which will have a capacity of 600,000 cubic meters and is expected to cost $800m to $900m.

Other projects expected to be tendered by the end of this year or early next year are a cogeneration plant for the Marjan oilfield and the Tanajib seawater plant for Saudi Aramco.

ACWA last week signed a contract to develop Saudi Arabia’s first solar PV plant worth around $300m. The plant will be built on a build, operate and own model with a 25-year agreement.

Read: Saudi Arabia selects ACWA Power for 300MW solar project

As the world’s largest oil exporter increases electricity tariffs to market prices, Padhmanathan expects industrial consumers to shift to renewables as prices become more competitive.

ACWA is also looking for M&A deals, he added, despite losing out on the chance to buy a number of power plants in the Philippines.

In Egypt, a memorandum of understanding for $14bn of power plants has been put on the back-burner as the country prioritises other projects, but Padmanathan sees more renewable projects happening in the country. ACWA Power expects to soon finalise a power purchase agreement with Egyptian authorities for the Dairut gas-fired 2,400MW plant.

Responding to concerns that sharemarket liquidity will be absored by Saudi Aramco’s forthcoming IPO, Padmanathan said the two companies have a different investor base.

“Our business is about stable long term return. It is very attractive to a particular investor class, people who think about retiring, people who think about generating income steadily in 20 years, insurance, pension funds, family offices, so therefore we are not concerned.”


© 2021 MOTIVATE MEDIA GROUP. ALL RIGHTS RESERVED.

Scroll To Top