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20 Apr 2014

ACWA Power and APICORP sign a Co-Investment initiative

International Company for Water & Power Projects (“ACWA Power”) and Arab Petroleum Investments Corporation (“APICORP”) announced today the official signing of a co-investment initiative, wherein both parties will join hands with APICORP co-investing with ACWA Power in its various projects in the power generation and water desalination space and across the various core geographies of ACWA Power. The initiative shall encompass both conventionally fired power generation facilities as also investments within the renewable energy space.

This path breaking initiative brings together the leading Saudi Arabian private developer and operator with an expanding geographic footprint and a class leading multilateral financial institution with a presence across the Arab world and possessing best in class capabilities in project evaluation and execution. In effect, the initiative endeavors to draw upon business synergies and deepen institutional relationship and cooperation.

Speaking on the occasion, Mr. Paddy Padmanathan, President & CEO of ACWA Power, stated that “the co-investment initiative with such a strong financial partner like APICORP will strengthen our capacity to fund our growth plans of doubling our power generation portfolio from 15.7 GW to 39 GW of electricity generation and 2.4 million m3/day to 5 million m3/day of desalinated water production by the year 2018.”

Speaking on the occasion, Mr. Ahmed –Al-Nuaimi, General Manger  & CE of APICORP, stated that “the co-investment initiative with ACWA Power goes very well with the new investment strategy and guidelines as per the Board of Directors of APICORP and will enhance the diversification of investments and achieve strategic benefits through the creation of investment opportunities in the Gulf region in particular and the Arab region in general and will marks APICORP’s entry into yet another important market sector. This investment will enhance the value to the shareholders of APICORP and support its position in the Power Generation and Water Desalination Market in the MENA region. And APICORP is proud to sign the co-investment initiative with ACWA Power.”

Furthermore, Mr. Thamer Al Sharhan, Managing Director of ACWA Power congratulated the ACWA Power and APICORP teams on the signing of the co-investment initiative and said “This partnership capitalizes on the alignment of the business objectives of both APICORP and ACWA Power which is focused on not only delivering to the strong demand for power and water but so doing by ensuring efficiency, lowest cost and reliability and at the same time maximizing the value retention in the countries that we operate in and create local employment opportunities all with an eye on sustainability..”

The co-investment agreement was signed today between ACWA Power and APICORP with ACWA Power committing to make available to APICORP the opportunity to co-invest in all assets being developed by ACWA Power in its core geographies for an initial period of 3 years.                                 

02 Apr 2014

ACWA Power Increases its Ownership in Shuqaiq (SqWEC)

ACWA Power announced today, that on March 3, 2014, their fully owned subsidiary namely Saudi Arabian Water and Electricity Company (“SAWEC”) acquired a 6% indirect shareholding in Shuqaiq Water and Electricity Company (SqWEC) from Mitsubishi Corporation of Japan (“MC”). SqWEC owns an 850 MW power generation and 212,000 cubic meters per day of water desalination capacity IWPP Plant in Shuqaiq on the western shores of Saudi Arabia 130 km north of Jizan. The project started commercial operations in May 2010.

Prior to this acquisition, SqWEC was owned by a group of government and private sector investors. The government ownership was in two parts; 32% by Public Investment Fund (PIF) and 8% by Saudi Electricity Company (SEC). The private sector ownership totals 60% of the project and was in three parts; ACWA Power (through SAWEC) owning 34%, Gulf Investment Corporation (“GIC”) owning 20% and MC owning 6%. The three private sector investors had invested in SqWEC through their holding company Shuqaiq International Water and Electricity Company (“SIWEC”).

The 6% indirect stake of MC in SqWEC was acquired by ACWA Power (through SAWEC) by purchasing all of MC’s shares in SIWEC. ACWA Power through SAWEC had signed a Share Purchase Agreement for this purpose with MC on July 29, 2013.

Upon completion of the transaction ACWA Power’s indirect stake in SqWEC has increased from 34% to 40%. 

Paddy Padmanathan, CEO of ACWA Power, reiterated that “ Acquiring these shares was a part of ACWA Power’s  wider strategy to deploy its capital in earnings accretive and value creating transactions. This transaction represented such an opportunity to ACWA Power and furthermore also gave an opportunity to increase its stake in a project which was completed before time and below budget and where ACWA Power is the lead developer. ”

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27 Jan 2014

ACWA Power enters UAE Power Generation and Water Desalination Market through a Strategic Acquisition

ACWA Power International (“ACWA Power”), the Saudi Water and Power developer, owner and operator, announces that it has entered into a definite agreement with Summit Global Management VIII B.V. (“Summit Global”), a wholly-owned subsidiary of Sumitomo Corporation (“Sumitomo”), to acquire its 20% stake  in Shuweihat CMS International Power Company PJSC (“SCIPCO”), which owns the Shuweihat S1 Power and Desalination Plant (S1 Plant) and its  50% equity interest in the Shuweihat O&M Limited Partnership (“SOMLP”).

The agreement to complete the acquisitions described above is conditional, inter alia, on certain consents being obtained, including those of the lenders to SCIPCO.

The S1 Plant, is a brownfield plant with a net production capacity of 1,500 megawatts of electricity and 100 million imperial gallons of desalinated water a day (454,200 m3/d), located about 250 km southwest of the Emirate of Abu Dhabi and was the third Independent Water and Power Project (“IWPP”) commissioned by Abu Dhabi Water & Electricity Authority (“ADWEA”).The plant began its commercial operation in 2005 under a 20-year off-take agreement from the Abu Dhabi Water & Electricity Company (“ADWEC”). The combined cycle co-generation facility, constructed by Siemens AG, Germany and Fisia Italimpianti, Italy SCIPCO is 60% owned by Abu Dhabi National Energy Company (“TAQA”) and its parent company, ADWEA. The remaining 40% in SCIPCO is equally owned between Sumitomo and International Power / GDF SUEZ. The S1 Plant is managed, operated and maintained by SOMLP (jointly and equally owned by Sumitomo and International Power / GDF SUEZ) pursuant to a 20-year Operations and Maintenance (“O&M”) agreement. The S1 Plant accounts for approx. 12% of the total electricity generation capacity and approx. 11% of the total water production capacity in the Emirate of Abu Dhabi.

Mr. Mohammad Abunayyan, ACWA Power Chairman, stated “This marks ACWA Power’s entry into yet another important market in the GCC, the third country within GCC after our significant positions in Saudi Arabia and Oman.  UAE is not only considered to have developed the best IPP/IWPP model across the globe, but also is a matured market and very high investment grade and creditworthy offtake. This investment will enhance the value to the shareholders of ACWA Power and strengthen its position as a major participant in the Power Generation and Water Desalination Market in the MENA region.”

 Mr. Paddy Padmanathan, ACWA Power President & CEO, said “The transaction represents a unique prospect for us to participate in the project company and the O&M company of a best-in-class IWPP that represents a strategic asset in Abu Dhabi’s electricity and water infrastructure. It offers ACWA Power an opportunity to add significant capacity to its existing portfolio of power generation and water desalination assets.”

The transaction is expected to close in March 2014, subject to closing conditions. Citigroup is acting as sole financial advisor to ACWA Power.

30 Nov 2013

ACWA Power Consortium sign Project Agreements and Finance Agreements for the 2060 MW Rabigh 2

On Saturday 30 November 2013, a consortium led by ACWA Power International (“ACWA Power”) which includes Samsung C&T, entered into a Power Purchase Agreement (“PPA”) with the Saudi Electricity Company (“SEC”) for the development, financing, construction, operation and maintenance of the Rabigh 2 Independent Power Project (“R2IPP”).

The project, to be developed on a BOO (build, own, operate) basis, will be located in Rabigh, on the western coast of Saudi Arabia, 130 Km north of Jeddah adjacent to the Rabigh 1 IPP and other existing SEC facilities. The Project, the fourth in SEC’s IPP program represents another significant milestone in the Saudi power sector given that this will be the first IPP to utilize combined Cycle Power plant with a gross thermal efficiency of c.58.8 % at Reference Site Conditions at Rabigh. The project company “Al Mourjan For Electricity Production Company” has been established with the winning ACWA Power consortium and SEC owning 50% each.

R2IPP is a greenfield independent power project with a net generation capacity of 2060 MW. The project will utilize Natural Gas as main Fuel and Arabian Super Light (ASL) as backup Fuel and with the application of combined Cycle Power plant in a configuration of three groups, each comprised of two gas turbines of enhanced efficiency, two heat recovery steam generators (“HRSG”) and one triple pressure steam turbine which will substantially reduce the fuel consumption, the impact on sea water temperatures and carbon emissions to the environment. R2IPP comprises 3 identical power blocks, each delivering a net output of 686.5 MW. The R2IPP plant will comply with all applicable environmental laws, guidelines, regulations and standards of the World Bank, IFC and the Saudi Presidency of Meteorology and Environment (“PME”).

The project will deliver net 2060 MW of electricity to SEC under the PPA which has a term of 20 years from the scheduled commercial operations date of June 2017.  The winning consortium selected Siemens for the gas turbine generator unit and steam turbine generator unit, and Samsung C&T to engineer procure and construct (“EPC”) the project. Once completed, the plant will be operated by the First National Operation & Maintenance Company (“NOMAC”), a subsidiary of ACWA Power, under a long-term Operations & Maintenance (“O&M”) contract.

The project agreements and finance agreements were all signed Saturday simultaneously.

74% of the total cost of the project of c. SAR 5.973 billion (USD 1.6 billion) is being funded by senior debt with the balance being provided by the shareholders in the form of equity bridge loans. The bank group contributing the senior debt comprises a mixture of international banks; Standard Chartered Bank (“SCB”), KfW-IPEX Bank (“KfW”) and Mizuho Bank (“Mizuho”) and local banks; Banque Saudi Fransi (“BSF”), Al Rajhi Bank (“ARB”), National Commercial Bank (“NCB”), Samba Financial Group (“Samba”) and Al-Inma Bank (“Al-Inma”). Four Saudi banks; BSF, NCB, Bank Al Jazirah and Bank Al Bilad are also providing equity bridge loans to the project.

Mohammad  A. Abunayyan, Chairman of ACWA Power stated: “ACWA Power is proud to be the lead developer of Rabigh 2 IPP not only because it will be the most efficient power plant in the Kingdom and MENA regional as well, but also because we have been able to establish a team of developers, equipment suppliers, EPC Contractor, O&M contractor and international & local lenders who, working together have been able to achieve a competitive tariff for SEC, which in turn will help to deliver value to the economic expansion of the country and at the same time serve the electricity needs of more than 2.5 million people in more than four hundred thousand households.”

The signing of these agreements today highlights a series of significant milestones:

  • The fourth IPP launched by SEC.
  • The most efficient power plant in the MENA region in general and Saudi Arabia in particular, which will reduce fuel consumption and maximize operational flexibility.

ACWA Power brings the total savings delivered by all of the projects developed by ACWA Power so far, to the Saudi economy and its people, to a total of [SAR 8.656 Billion]. This project led by ACWA Power, the Kingdom’s well established developer and operator of power plants, also  continues to validate the thesis that a local developer leading such transactions puts the interests of the home country as its utmost priority; minimizing capital costs and operating expenses without compromising on reliability of power supplies for the duration of the contracted commitments, all the while ensuring fuel efficiency, reducing environmental impact and providing meaningful employment to the citizens of the country.

 

20 Nov 2013

MESIA Names ACWA Power “Utility Company of the Year” and Noor 1 “Project of the Year”

ACWA Power International (ACWA Power) has been awarded the 2013 “Project of The Year” prize for its Noor1 Concentrated Solar Power project and “Utility Company of The Year” by the Middle East Solar Industry Association Awards (MESIA) at an awards dinner ceremony in Abu Dhabi. The prestigious event was attended by the international solar industry community. Since its establishment in 2004, ACWA Power has made its indelible mark on the competitive landscape of the Power and Water industry in the MENA region, reaping awards from some of the most prestigious publications and industry associations.

Earlier this year BOKPOORT (CSP) (IPP) was recognized as the 2013 Solar Deal of the Year by World Finance Magazine; a leading financial magazine. World Finance stated “Throughout the three month appraisal, World Finance cited BOKPOORT's scale, scope and complexity in reaching 21,000 homes as South Africa's first renewable technology at commercial scale to provide for the country's daily peak demand; and for having the largest thermal storage ever adopted for a solar plant”.

Over the last nine years, ACWA Power has received numerous distinguished awards for its projects, initiatives, growth, CSR programs, and project financing models from a range of recognizing bodies & publications including SAGIA, Project Finance International, Global Water Intelligence, Euromoney, Thomson Reuters and World Finance.

Paddy Padmanathan, President & CEO of ACWA Power said that “We are very proud to receive these prestigious awards from MESIA. These awards recognize our team of multidisciplinary professionals who have completed a large number of similar transactions.  The awards also recognize our ability to consistently select the optimal technical solution, partner with the most efficient engineering, procurement and construction (EPC) service providers and implement an effective operation and maintenance strategy to deliver the lowest possible tariff”.

Padmanathan continued “Noor 1 CSP IPP is a milestone project where ACWA Power has again proved our model to be successful by demonstrating the cost at which solar power can be produced, which is significantly lower than what has been achieved to date.  Noor 1CSP IPP brought us closer to achieving our goal of reaching a total power production capacity target of 38,000 MW by the end of 2018 of which, maximum 10% will be from renewable sources”.

Rajit NANDA, Chief Investment Officer of ACWA Power said “There is no greater honor than being recognized by one’s own peers, a humbling while at the same time highly motivating experience for our teams, given that we are being judged against well-established international competitors who are extremely active not just within the MENA region but who operate right across the world.

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