PIF considers buying stake in power firm ACWA

Investors in the oil sector are bullish, eager to see returns grow after lagging for several years. (Reuters)
Updated 14 November 2016

PIF considers buying stake in power firm ACWA

ALKHOBAR: Saudi Arabia’s main sovereign wealth fund, Public Investment Fund (PIF), is considering buying a stake in Riyadh-based ACWA Power, which operates power and water plants around the world, said sources familiar with the matter.
PIF, which already owns a 13.7 percent stake in ACWA indirectly through a subsidiary, invited investment banks last month to pitch for the role of advising it on a potential ACWA deal, according to four sources.
Talks are still at a preliminary stage, and neither party has appointed an adviser, said two of the sources, who are based in the Gulf.
Privately held ACWA describes itself as an investor, developer, co-owner and operator of a portfolio of plants in Europe, Asia and Africa that generate more than 23 gigawatts of power and produce 2.5 million cubic meters of desalinated water a day.
The fund declined to comment, when contacted by Reuters on Monday. ACWA also declined to comment.
PIF’s investment strategy aims to help the government diversify the Saudi economy away from oil into power and other sectors.
PIF’s subsidiary Sanabil Investments, which focuses on making direct equity investments in local companies and projects, acquired a 13.7 percent stake in ACWA in January 2013.
It is unclear how the new investment will be made at this stage: whether it would be structured as a stake increase by Sanabil or whether the PIF will take a direct stake, a third source said.
One of the Gulf-based sources said PIF would like to increase its total holding to anywhere between 25 and 35 percent.
The fund has also been behind a number of domestic investments in recent months — ownership of a stalled financial district project in Riyadh is to be transferred to the fund, and the fund is expected to make an investment into King Abdullah Economic City.
PIF is seen as a key driver of the kingdom’s Vision 2030 plan to diversify the economy, with the authorities aiming to turn it into the world’s largest sovereign wealth fund.
Central to the reform plan is greater involvement by the private sector in the Saudi economy, including in the power sector: it has called on raising the percentage of power plant electricity generation through strategic partners to 100 percent from 27 percent currently.
Vision 2030 has also called for generating 9.5 gigawatts of renewable energy, an area in which ACWA has developed significant expertise with around half of its portfolio in “clean” energy.
Other shareholders in ACWA include Saudi’s Public Pension Agency, which bought a 5.7 percent stake at the same time as Sanabil, and World Bank unit International Finance Corp., which invested $100 million for an undisclosed holding in mid-2014.


Conflict-hit Libya to restart oil operations but with low output

Updated 10 July 2020

Conflict-hit Libya to restart oil operations but with low output

  • There is significant damage to the reservoirs and infrastructure
  • A first cargo of 650,000 barrels will be shipped by the Kriti Bastion Aframax tanker

TUNIS: Libya’s National Oil Corporation (NOC) lifted force majeure on all oil exports on Friday as a first tanker loaded at Es Sider after a half-year blockade by eastern forces, but said technical problems caused by the shutdown would keep output low.
“The increase in production will take a long time due to the significant damage to reservoirs and infrastructure caused by the illegal blockade imposed on January 17,” NOC said in a statement.
A first cargo of 650,000 barrels will be shipped by the Kriti Bastion Aframax tanker, chartered by Vitol, which two sources at Es Sider port said had docked and started loading on Friday morning.
The blockade, which was imposed by forces in eastern Libya loyal to Khalifa Haftar’s Libyan National Army (LNA), has cost the country $6.5 billion in lost export revenue, NOC said.
“Our infrastructure has suffered lasting damage, and our focus now must be on maintenance and securing a budget for the work to be done,” NOC chairman Mustafa Sanalla said in the statement.
Control over Libya’s oil infrastructure, the richest prize for competing forces in the country, and access to revenues, has become an ever-more significant factor in the civil war.
The internationally recognized Government of National Accord, supported by Turkey, has recently pushed back the LNA, backed by the United Arab Emirates, Russia and Egypt, from the environs of Tripoli and pushed toward Sirte, near the main oil terminals.