Saudi Arabia’s Public Investment Fund has taken a stake in ACWA Power as the sovereign investor builds its presence in the Kingdom’s booming renewables sector.
As a result of the investment, PIF will become a 15.2 percent direct shareholder in ACWA Power, PIF said in a statement. PIF’s total shareholding, directly and indirectly represents a 24.98% percent equity interest in ACWA Power.
The utility, which was formed in 2004, has expanded rapidly from developing desalination plants to becoming a major international investor in solar and wind projects.
It currently accounts for about 14 percent of power generation in the Kingdom and almost a third of desalinated water. It also has 40 power or desalination projects in operation and under construction, and an additional seven projects in advanced development, it said in a statement.
ACWA Power recently achieved the lowest contracted solar tariff in the world for the 300MW Sakaka PV project, the first ever utility scale solar power project in Saudi Arabia.
“The investment by PIF reflects its commitment to the Kingdom of Saudi Arabia’s energy transition plans of diversification of the fuel mix in power generation including the introduction of significant renewable energy capacity and the expansion of much needed additional power generation and desalinated water production capacity,” said ACWA CEO Paddy Padmanathan. “While ACWA Power will continue to focus on reliably delivering electricity and desalinated water at the lowest cost, ACWA Power also intends to leverage its domestic and international market-leading position to play a pivotal role in the Kingdom of Saudi Arabia’s energy transition plan.
HSBC acted as the sole financial adviser to PIF and JP Morgan acted as the sole financial adviser to ACWA Power on the transaction.