CAIRO: ACWA Power Co. has inked agreements valued at over $120 million for energy projects in Uzbekistan in what is a further strengthening of bilateral energy relations between Saudi Arabia and the Central Asian country.
The Saudi company has signed a hydrogen purchase deal with Uzkimyosanoat, the state-owned chemical entity, and a power purchase contract with the National Electric Grid of Uzbekistan, according to a press release.
The deal with Uzkimyosanoat will focus on decarbonizing the sector through green hydrogen projects, with construction being executed in two phases.
The second set of agreements involves the signing of financing documents for Karatau wind farm, formerly referred to as the Nukus Wind Project, with a total investment value of $120 million.
The National Electric Grid of Uzbekistan will serve as the exclusive buyer of electricity generated by the project for 25 years.
The Uzbek Ministry of Economy and Finance has provided support for the project, and funding has been secured through Deutsche Investitions, the European Bank for Reconstruction and Development, and Proparco.
Marco Arcelli, CEO of ACWA Power, expressed his enthusiasm for the Uzbek government's commitment to decarbonisation and investments in energy diversification.
“We enable sustainable growth of communities around the world by providing competitive power and water desalination solutions, and in green hydrogen, we are the first mover in the industry with our participation in the Neom Green Hydrogen Project with Air Products and NEOM,” he said.
“Our team has done a magnificent job to launch our second project in Uzbekistan together with Uzkimyosanoat and the Uzbek government to make the chemical industry in Uzbekistan a world leader in decarbonisation. Moreover, the financial close of the Karatau wind project with the support of EBRD, DEG, Proparco and the Ministries of Energy and Investment, Industry & Trade of Uzbekistan is a key milestone in the installation of about 5,000 megawatts of capacity in the country by ACWA Power, which will reduce CO2 emissions by over 6 million tons by 2030,” Arcelli added.
The hydrogen and power contracts will span 15 and 25 years, respectively, encompassing project development, construction, and operation.
These contracts are projected to financially impact once the project achieves commercial operations, targeted for December 2024.
Timur Mukhammedjanov, chairman of Uzkimyosanoat, said: “We are excited about the limitless possibilities this agreement brings, positioning UKS as a key player in the emerging Green fertilizers economy. It is a testament to our commitment to innovation, environmental stewardship, and building a prosperous, low-carbon future for our citizens and the world.”
ACWA Power currently has over five active projects in Uzbekistan, including four wind projects and a combined gas cycle turbine facility, with the country being the firm's second most valuable market after Saudi Arabia.
“Uzbekistan has emerged as one of the most exciting growth countries for ACWA Power in recent years and is our biggest investment geography outside of the Kingdom. We are proud that our giga scale development experience in green hydrogen is making us the preferred choice of partners across the world,” Mohammad Abunayyan, chairman of ACWA Power, said in January.
The firm operates in 12 countries, with total investments worth $74.8 billion and 72 assets.
Furthermore, in the first quarter of 2023, the company reported a consolidated net profit of SR270 million ($71.9 million), a 78 percent rise compared to the same period the previous year.