RENEWABLE ENERGY

ACWA Power’s initial public offering in October marked a new chapter in the expansion of Saudi Arabia’s renewable energy sector.

The company, which is 44.16% owned by the Public Investment Fund, 22.75% by Vision Investment, and 11.20% by Al Rajhi Holding post-IPO, issued just over 85 million new shares at SAR 10 each, comprising 11.67% of its share capital.

The IPO was oversubscribed 250 times in a sign of the company’s promising outlook.

ACWA Power, or the International Company for Water and Power Projects, is a leading electricity and water provider, both in fossil fuel and renewable technologies, in Saudi Arabia and a significant participant in the power generation and water desalination industries in the countries in which it operates.

The group has estimated market shares of 24%, 43%, 14%, 29%, 22% and 23% in Saudi Arabia, Oman, the UAE, Bahrain, Jordan and Uzbekistan, respectively, according to its prospectus
  

GREEN ADVOCATE

Around a third of the company’s power generation projects (including operating, under construction, and in advanced development) utilize renewable technologies (solar and wind), and another 44% use natural gas, so that approximately 77% of the gross power capacity of the group’s power generating projects utilise either renewable or low carbon sources.

All told, the group had a portfolio with a total estimated project cost of over SAR 248 billion, comprising 64 power and/or desalinated water projects, in 13 countries, with a mix of renewable energy and conventional fuel projects.

In recent months, the company signed financing worth USD2 billion with Natixis CIB to develop new projects in the region, including in renewable and clean energy.

ACWA Power, which has committed to net-zero emission by 2050, sold one of its four oil-fired assets this year, which is a testament to the company’s commitment to remain at the forefront of energy transition.

The company gave up a 32% equity stake in Shuqaiq Water and Electricity Company, an oil-fired asset, to reduce its carbon footprint.

In addition, the company also saw the financial close of the 1,500 MW Sudair PV independent power projects in July, in which ACWA Power holds a 35% equity stake. The project is in partnership with PIF and Saudi Aramco, which own 35% and 30% of the project, respectively.

2060 GOALS

ACWA Power is part of a major initiative by the Saudi government to reach a target of net-zero carbon emissions by 2060. The kingdom aims to increase the share of renewable energy to 50% of the total energy mix by 2030, while shale gas will account for the remaining 50%.

The kingdom also aims to provide a package of initiatives to boost the Carbon Circular Economy, which will contribute to renewing the energy mix and reducing its carbon emissions by 2060.

Saudi Arabia recently joined the Global Methane Pledge, which aims to reduce methane emissions globally by 30% compared to the level of emissions in 2020, in line with the goals set out by the Saudi Green Initiative

The Saudi Green Initiative aims to reduce more than 278 million tonnes per annum (mtpa) of carbon emissions by 2030, more than half of its
annual average emissions of 517 mtpa.

“The kingdom will plant 450 million trees and rehabilitate 8 million hectares of degraded lands by 2030, reducing 200 million tonnes of carbon emissions with additional initiatives to be announced in the years to come. The transformation of Riyadh into one of the world’s most sustainable cities is already underway,” according to the SGI.

Saudi Arabia also joined the Global Ocean Alliance, established the Ocean Exploration Foundation, and announced a number of initiatives – including a Global Center for Tourism Sustainability – as it accelerates efforts to mitigate the impacts of climate change.

These combined initiatives will represent an investment of SAR 700 billion being spent to stimulate growth of the sustainable economy.

“The Saudi Green Initiative will provide huge investment opportunities for the private sector, quality job opportunities for the next generation of leaders in the kingdom and enhanced international relationships that will have a positive impact on the region and the world,” according to SGI.