The leading owner and operator of energy and desalinated water plants, ACWA Power has endorsed a share purchase agreement with Samsung C&T to obtain 4.99% of its shares, with a choice to acquire the residual stake of Samsung C&T in Hajr Electricity Production Company (HEPC).
HEPC, which is managing Qurayyah Independent Power Plant (IPP), is currently owned in the majority by Saudi Electricity Company with a 50% stake. Other stakeholders include ACWA Power (consortium) with 22.49% (up from 17.5%), MENA Infrastructure Fund with 15% and Samsung C&T with 12.51% (decreased from 17.7%) who compound to the balance 50% ownership in the firm.
With the acquisition of the stake from Samsung C&T, ACWA Power will further consolidate its position as the second-largest shareholder after the Offtaker Saudi Electricity Company (SEC). The total cost of the project was $2.7 billion, with most of it (75%) financed through long term project financed debt and the remaining in the form of equity.
The project was approved in 2011 and units started power transmission to the grid in 2013, making the project as one of the world’s biggest IPP combined cycle gas-fired power projects to date.
With a net capacity of 3,927 MW, Qurayyah IPP is rated one of the most efficient projects of its kind in Saudi Arabia. Environmentally, the project has the potential to save more than six thousand cubic meters of carbon emissions annually.
“The increase of equity participation in the Qurayyah IPP project is an indication of ACWA Power’s confidence in the Kingdom’s economy and social prosperity set on a growth trajectory by the steady implementation of the various programs within the framework of the ambitious Saudi Vision 2030.”
“As a proud Saudi company, we are committed to serving the Kingdom to soar to new heights by continuing to deploy environmentally responsible and most efficient power generation and desalinated water production solutions at least cost.”
The Qurayyah IPP project bid was a landmark tariff, 15.5% cheaper than the nearest bidder which has delivered more than $510 million in savings over 20 years to the economy of the Kingdom of Saudi Arabia and saving more than 160 million cubic feet of natural gas per day.
Rajit Nanda, Chief Investment Officer of ACWA Power said: “Saudi Electricity Company has always been a key partner in our growth plans within Saudi Arabia, and we are pleased to further solidify our ties on yet another milestone project.”
“The investment in such an exemplary project also showcases the crucial role the private sector plays in supporting the economic transformation envisioned by our Saudi leadership.”