Saudi Public Investment Fund takes 15.2% stake in ACWA Power

Public Investment Fund of Saudi Arabia's total interest in the Saudi power company is now almost 25 percent
Saudi Public Investment Fund takes 15.2% stake in ACWA Power
The Public Investment Fund of Saudi Arabia has taken a 15.2 percent direct stake in ACWA Power, a developer, owner, and operator of power generation and water desalination plants in Saudi Arabia.
By Eddie Taylor
Thu 05 Jul 2018 11:56 AM

The Public Investment Fund of Saudi Arabia has taken a 15.2 percent direct stake in ACWA Power, a developer, owner, and operator of power generation and water desalination plants in Saudi Arabia. 

Considering PIF subsidiary Sanabil already owns 9.78 percent, the announcement takes PIF’s total stake – direct and indirect – in ACWA to 24.98 percent, or a quarter of all shares.

The deal had been revealed back in February this year, although ACWA had been reportedly planning the sale as far back as 2016 and had appointed HSBC to oversee it.

According to Reuters, there are also plans to sell an additional 30 percent stake via an IPO in Riyadh by the end of the year, with JP Morgan, Citigroup, Natixis and Riyad Capital hired to advise on that process.

The entire investment will be in the form of a capital increase which will be used to “support ACWA Power’s growth strategy and investment plan”, the company said.

Formed in 2004, ACWA Power has become a leading player in the power generation and desalination sectors. It has a total of 40 power and desalination projects in operation and under construction, and has recently made significant strides in renewable energy. 

Its Sakaka PV solar power project, the first ever utility scale solar power project in Saudi Arabia, managed to achieve the lowest contracted solar tariff in the world at $0.023417/kWh.

“I am delighted to welcome the PIF as a significant shareholder of ACWA Power culminating a process where the offer was received in early 2017,” said Mohammad Abunayyan, chairman of ACWA Power.

“Their endorsement underlines the central role we play in the Saudi economy and our successful international expansion all geared towards achieving the objectives of Vision 2030.

“It is also a recognition of the tremendous and tangible growth opportunities the company can access both in the domestic and international markets. The PIF reinforces what is already a high-quality institutional shareholder base which includes the Public Pension Agency of Saudi Arabia and World Bank’s International Finance Corporation.”

The investment will help raise the value of PIF's assets under management to in excess of $400bn by 2020, which is hoped to create 256,000 jobs along the way.

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