Saudi Arabia’s PIF becomes 25% owner of power group ACWA

The sovereign wealth fund’s investment comes ahead of a planned IPO by the company, which has increasingly been diversifying towards renewable energy globally.

Saudi Arabia’s Public Investment Fund has become a 24.98 percent owner of local energy and water group ACWA Power.

While the sovereign wealth fund has held an indirect ownership of ACWA since 2013 through subsidiary Sanabil Direct Investment Company – currently totalling 9.78 percent – the acquisition by PIF of 15.2 percent marks the group’s first direct involvement with ACWA.

PIF said the investment is part of its Pubic Investment Fund Program, a series of targets for PIF in both the domestic and international markets to boost the country’s diversification of its development and growth. PIF’s tie-up with Blackstone for its $40 billion US infrastructure fund forms part of the programme.

“It also underlines the strategic support PIF has provided to ACWA Power in funding its growth and PIF’s role in unlocking the broader sector as a significant investor in a number of utilities businesses,” PIF added in a statement.

ACWA Power’s shareholder base also includes the International Finance Corporation and the Saudi Public Pension Agency.

The company, according to statements ACWA Power chief executive Paddy Padmanathan recently made to Bloomberg, wants to pursue an IPO “sooner rather than later”. However, it did not respond to a request for comment on the size of PIF’s investment nor the timeline of the IPO.

ACWA Power provides 14 percent of Saudi Arabia’s power and 33 percent of its desalinated water consumption and earlier this year was awarded the 300MW Skaka solar project, Saudi Arabia’s first utility-scale renewable energy plant.

However, in recent years it has also expanded its international portfolio, particularly in the Middle East in Jordan, UAE and Oman, as well as in Egypt. ACWA is also a significant player in Morocco’s solar sector, has financed both solar and coal projects in South Africa, a coal plant in Vietnam, as well as projects in Turkey and Bulgaria. The Riyadh-based company also has offices in Madrid and Beijing.