PIF-backed ACWA Power plans to invest $16bn in new projects in 2021

PIF-backed ACWA Power plans to invest $16bn in new projects in 2021
ACWA Power’s portfolio includes 64 assets with an investment value of SR248 billion ($66 billion).
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Updated 08 July 2021

PIF-backed ACWA Power plans to invest $16bn in new projects in 2021

PIF-backed ACWA Power plans to invest $16bn in new projects in 2021
  • Utilities developer recently won formal approval to launch its long-awaited IPO

RIYADH: ACWA Power, the utility developer backed by Saudi Arabia’s Public Investment Fund (PIF), is planning to invest $16 billion in new projects around the world in 2021, ahead of plans for an initial public offering (IPO).

Early last year, CEO Paddy Padmanathan said the company planned to invest $10 billion in new projects in 2020. In light of the restrictions put in place by global governments as a result of the coronavirus (COVID-19) pandemic, some of these plans took longer to materialize.

“The only challenge that we had on the new growth business is that some of the transactions where we were successful have taken anywhere between three to six months more in coming to what I would call the end of the development phase, which is the financial close and start of the construction,” Rajit Nanda, ACWA’s chief portfolio management and interim chief investment officer, told Arab News.

“We did approximately $3.5 billion of projects during the course of 2020, taking them through to financial close, and during the course of 2021 we are targeting about $16 billion of projects under close, four of them have already closed actually, a couple of them closing in the next 30 days as we speak.

“We are doing exactly what we would have wanted to do in 2021, plus we are doing a little bit more of what we should have got done in 2020. So, there is some spill-over,” he said.

The investment officer said ACWA Power’s main geographical focus is the Gulf Cooperation Council (GCC), with Saudi Arabia at the core of it, but it is also looking at opportunities in Africa and at markets in Central Asia and parts of Southeast Asia, such as Vietnam, Indonesia and Bangladesh.

At the end of last year, ACWA Power announced it will develop Azerbaijan’s first wind power development in collaboration with local entities, as part of joint energy projects with the Kingdom worth $300 million.

“We already have very important positions in countries like Egypt and Morocco. But we are looking at a few other countries, like Senegal and Tunisia and so forth, in terms of our expansion objectives,” Nanda explained.

Established in Riyadh in 2004, ACWA Power employs around 3,500 people and is currently active in 13 countries in the Middle East, Africa, Central Asia and Southeast Asia. Its portfolio includes 64 assets with an investment value of SR248 billion ($66 billion).

“The company has gone through some very interesting dynamics in terms of evolution. One of them, which is a very important one, is the fact that the sovereign wealth fund of the Kingdom of Saudi Arabia is now a 50 percent important shareholder in ACWA Power,” Nanda said.

Its association with PIF means the company has been able to win some major contracts related to the Kingdom’s Vision 2030 megaprojects. One of the most prominent recent examples is the $6 billion hydrogen project, in partnership with NEOM and Air Products. 




Rajit Nanda

The project is now in its early stages, with completion expected by 2025. In an interview with Asharq News, the Chairman of ACWA Power Mohammad A. Abunayyan, said: “NEOM city enjoys a strategic location for renewable energy, especially with wind and solar energy, which will enable the joint venture to convert renewable energy into green hydrogen with new technology for the first time. This project benefits not only NEOM but the whole world, as its green energy products will be exported everywhere.”

This joint venture will produce 650 tons per day of carbon-free hydrogen and 1.2 million tons of green ammonia per year, reducing carbon dioxide emissions by the equivalent of 3 million tons per year.

Another major win in the Kingdom was the awarding of a contract from The Red Sea Development Company (TRSDC) to design, build, operate and transfer the Red Sea Project’s utilities infrastructure, one of the Kingdom’s flagship new tourism projects

This will be the region’s first tourism destination powered solely by renewable energy. The contract includes the provision of renewable power, drinking water, wastewater treatment, solid waste management and district cooling for the 16 hotels, international airport and infrastructure that make up Phase 1 of the Red Sea Project.

To fund its ambitious pipeline of projects, ACWA Power last month raised SR2.8 billion from its first sukuk issuance. The sukuk will have a seven-year tenor and was 1.8 times oversubscribed.

“Being in a capital-intensive business (such as) power generation and water, it is part of our business model to continuously evaluate the funding options that are available to us,” Nanda said. “We have established our connections with the debt capital markets. We have put ACWA Power in front of these high-quality investors and that chain of relationship is now established.”

While Nanda would not give any further details on ACWA Power’s long delayed IPO, the Capital Market Authority last week gave the green light for the listing of an 11.1 percent stake. The approval remains in place for six months, but chairman Abunayyan said in November he expected the IPO to happen by the end of 2021.


US investment bank Moelis to open Riyadh office, hire Saudis

US investment bank Moelis to open Riyadh office, hire Saudis
Updated 26 November 2021

US investment bank Moelis to open Riyadh office, hire Saudis

US investment bank Moelis to open Riyadh office, hire Saudis

RIYADH: US investment bank Moelis & Co. plans to open an office in the Saudi capital Riyadh and will soon begin hiring staff in the Kingdom, Bloomberg reported.

The New York-based company sees the Kingdom attracting more foreign investors and benefiting from an “energy supercycle,” Vice Chairman Eric Cantor said in an interview.

The boutique financial adviser, founded by Wall Street veteran Ken Moelis, wants to do more deals in the region as the world’s biggest oil exporter prepares for as many as 160 privatizations in 2022, as well as a flood of initial public offerings to the Kingdom’s stock market.

“We are waiting for a final stamp on our license,” Cantor said. “It’s forthcoming and part of that is hiring Saudis,” he said, without saying how many people the bank wants to employ.

Moelis has its main office for the Middle East in Dubai. The move to open one in Riyadh comes as Saudi Arabia pushes international firms to relocate their regional headquarters there.

 


Oil demand to return to 2019 levels by end of 2022: Baker Hughes CEO

Oil demand to return to 2019 levels by end of 2022: Baker Hughes CEO
Updated 26 November 2021

Oil demand to return to 2019 levels by end of 2022: Baker Hughes CEO

Oil demand to return to 2019 levels by end of 2022: Baker Hughes CEO

RIYADH: Oil demand will return to 2019 levels by the end of 2022, despite some delays in projects due to repercussions from the pandemic, Baker Hughes CEO Lorenzo Simonelli told Al-Arabiya.

National oil companies in the Middle East have been preparing for the increased demand, while international oil companies, especially those in North America, have been maintaining financial discipline in returning funds to shareholders, he said.

However, some independent oil companies have already begun to increase their capital spending, he said.

Currently, Baker Hughes sees an improvement in oil and gas services activity, not only in North America, but also in international basins with low costs, he said.

When it comes to developing its products, Baker Hughes always takes into account carbon emissions and the Texas-based energy services company is trying to shift its sources in its manufacturing operations to renewables and has contracted with suppliers, Simonelli said.

The company pledged to reduce carbon emissions of the first and second scope by 50 percent by 2030, and to zero by 2050, Simonelli said. The company is now concerned with dealing with third scope emissions, he said.

 


Saudi Arabia startups see huge growth in eco-friendly ‘impact’ funding 

Saudi Arabia startups see huge growth in eco-friendly ‘impact’ funding 
Updated 26 November 2021

Saudi Arabia startups see huge growth in eco-friendly ‘impact’ funding 

Saudi Arabia startups see huge growth in eco-friendly ‘impact’ funding 

RIYADH: Venture capital impact investment in Saudi Arabia reached a new high in 2021 in both total number of transactions and capital deployed, according to a report produced by MAGNiTT and Saudi Aramco.

Impact investments are those aimed at generating a measurable social and environmental benefit alongside a financial return. 

Impact funding in the Kingdom up to the third quarter of 2021 was 130 percent higher than in 2020 in terms of funding, and 21 percent higher in transactions.

Some $444 million were invested through 403 deals with impact-driven startups across the Middle East and North Africa between 2016 and the third quarter of 2021, according to the report.

Of those deals, 20 percent involved Saudi-based firms.

Flat6Labs was the leading impact investor in startups based in the MENA region with 45 transactions between 2016 and the third quarter of this year to date. 

The Saudi Aramco Entrepreneurship Center, 500 Startups, the King Abdullah University of Science and Technology Innovation Fund, Oasis 500 and Falak Startups invested in 12 or more funding rounds raised by impact-driven startups in MENA.

The education and healthcare technology sectors accounted for the highest share in total impact VC deals, collectively registering 40 percent of all transactions in MENA from 2016 to the third quarter of this year to date.

The energy sector played a key role in impact investments across MENA, with 95 percent of all funding going to startups within the impact ecosystem.

 


Cryptocurrencies tumble on COVID-19 variant; virtual land sells for $2.5m: Crypto wrap

Cryptocurrencies tumble on COVID-19 variant; virtual land sells for $2.5m: Crypto wrap
Updated 26 November 2021

Cryptocurrencies tumble on COVID-19 variant; virtual land sells for $2.5m: Crypto wrap

Cryptocurrencies tumble on COVID-19 variant; virtual land sells for $2.5m: Crypto wrap

Bitcoin led a rout in cryptocurrencies on Friday as investors fled assets considered riskier, including stocks and commodities, and headed for the refuge of government bonds, the Japanese yen and the US dollar.

Concerns over a new COVID-19 variant that may evade vaccines and spread more quickly than previous mutations were seen as responsible for the movements.

Bitcoin, the largest digital currency, fell as much as 9.2 percent to $53,551, its lowest since Oct. 10. That would be Bitcoin’s biggest one-day decline since Sept. 20, leaving it more than one-fifth lower since hitting a record high of nearly $70,000 earlier in November.

The second-largest cryptocurrency, Ether, fell over 13 percent to its lowest in a month, trading at $3,924, down almost 20 percent from its record high, hit on Nov. 10.

A number of European and Asian nations have suspended travel to and from southern Africa after a potentially more deadly COVID-19 variant emerged in Botswana and South Africa. The variant has so many mutations that current vaccines may not be effective against it, according to scientists.

“The spread of (the variant), especially to other countries, could wither investor appetite further,” said Yuya Hasegawa at Tokyo-based exchange Bitbank. “BTC's upside will likely be limited and the market should brace for further loss.”

While cryptocurrencies wobbled, a plot of land in Axie Infinity, an animated, metaverse pet-training game, sold for $2.5 million on Thursday, according to a tweet on the game’s Twitter account.

The sale, for 550 ether, was the highest for a single plot of virtual land, according to the tweet. The transaction was for a section of Genesis land, one of several types available in the game.

A larger sale of virtual real estate took place on Monday in Decentraland. In that transaction, 618,000 MANA, worth about $3.2 million at the time, bought 116 land parcels, according to Tokens.com, whose Metaverse Group subsidiary made the purchase.

Interest in the metaverse has surged in recent months, spurred by Facebook, which changed its name to Meta in October in a sign of its increasing focus on the sector.

Revenue from virtual gaming worlds could grow to $400 billion in 2025, from $180 billion in 2020, Grayscale Investments said on Thursday. The overwhelming majority of that $400 billion will be in-game spending, compared to spending on premium games, the company said.

Grayscale defined the metaverse as “interconnected, experiential, 3D virtual worlds where people located anywhere can socialize in real-time to form a persistent, user-owned, internet economy spanning the digital and physical worlds.”


Anghami to complete US merger ‘soon,’ CEO says

Anghami to complete US merger ‘soon,’ CEO says
Updated 26 November 2021

Anghami to complete US merger ‘soon,’ CEO says

Anghami to complete US merger ‘soon,’ CEO says
  • Maroun said the company’s priority is growth not profitability as it seeks to increase its market share from 6 percent

RIYADH: Lebanon’s Anghami, known as the Spotify of the Arab world, will not postpone its merger with the blank-check company Vistas Media in a potential $90 million deal, according to the firm’s CEO.

Eddie Maroun said the agreement had suffered a delay due to the procedures of the Securities and Exchange Commission in the US, but the deal will still go ahead.

The process is currently in its final stages, and the implementation will be announced very soon, he told Al-Arabiya on Thursday.

Maroun said the company’s priority is growth not profitability as it seeks to increase its market share from 6 percent.

He expects Anghami to achieve profitability within three years, he added.

Subscriptions represent 80 percent of the company’s revenue with the rest coming from advertising, Maround said.

Founded in 2012 in Lebanon, Anghami is the first legal music streaming platform in the Middle East and North Africa region.