ACWA Power plans selective mergers to boost profits, secures $15.4bn in financing over 2 years

07/07/2025 02:56 AST

Saudi Arabia's energy and water desalination giant ACWA Power has drawn investor attention regarding its expansion strategy, following the approval of its shareholders for a SR7.1 billion ($1.8 billion) rights issue.

In an interview with Al-Eqtisadiah, Abdulhameed Al-Muhaidib, the company's chief financial officer, outlined ACWA Power's growth plans, financing approach, and future targets.

ACWA Power has been actively expanding its global presence, securing $500 million in new US agreements and reinforcing its position as Uzbekistan's top energy investor with $15 billion committed to 19 projects, including 18 in renewables.

Strategic expansion and capital increase
Al-Muhaidib said over 77 percent of the rights issue was subscribed by major shareholders, reinforcing confidence in ACWA Power's strategy.

The capital raise aims to fund new projects and expand the company's global footprint, particularly in renewables, water desalination, and green hydrogen.

"This move supports our long-term strategy to triple managed assets to $250 billion by 2030," Al-Muhaidib told Al-Eqtisadiah. The company expects annual equity contributions of $2 to $2.5 billion from 2024 to 2030, up from $1 to $1.3 billion in previous years.

Selective mergers and global targets
ACWA Power is eyeing selective mergers and acquisitions in key markets to accelerate profitability and secure stable cash flows. "M&A opportunities allow us to fast-track earnings while maintaining financial discipline," Al-Muhaidib said.

The firm is actively exploring investments in Malaysia, Africa, and other Asian markets with high infrastructure demand.

The proceeds from the rights issue will primarily fund new projects in the Kingdom and strategic international markets, including the Middle East, Central Asia, Southeast Asia, and China.

2030 goals: renewables, water, and green hydrogen
By 2030, ACWA Power aims to exceed 175 gigawatts in power generation capacity, up from 78.9 GW today, produce 15 million cubic meters of desalinated water daily, and generate 1 million tonnes of green hydrogen annually, with potential for an additional 1 million tonnes under new contracts.

Balancing debt and equity
Despite securing SR58.6 billion in project financing over the past two years, Al-Muhaidib said that the capital increase does not signal a reduction in borrowing.

"We maintain a balanced approach, leveraging both project debt and equity to sustain growth," he added.

ACWA Power's net debt-to-operating cash flow ratio stands at 6.4 times, which is deemed healthy for growth-focused firms.

Asia expansion and China entry
ACWA Power's recent acquisition in China marks its broader ambitions in Asia. "China is a strategic market, and we are evaluating opportunities in Malaysia and Africa," Al-Muhaidib said. The company has an 80-person team in China and a 1 GW renewable pipeline there.

Rapid execution and financing success
The SR58.6 billion in project financings reflects ACWA Power's strong lender relationships and execution capabilities. "Our integrated model - combining development, investment, and operations - ensures timely delivery," Al-Muhaidib added.

With a focus on disciplined growth, ACWA Power remains committed to its 2030 targets while maintaining environmental, social and governance standards.

Arab News