Saudi ACWA Power picks JPMorgan, Citi, NCB Capital for IPO

06/03/2018 05:52 AST

Saudi Arabia’s ACWA Power has selected JPMorgan, Citigroup and Saudi Arabia’s NCB Capital to arrange the initial public offering of its shares, which could raise up to $1 billion, sources said.

The three banks have been selected as global coordinators and a third international bank is close to being chosen, one of the sources told Reuters.

ACWA Power, a developer of electricity and water projects in the Middle East, Africa and Southeast Asia, is looking to sell a 30 per cent stake to investors and list in Riyadh, banking sources have told Reuters.

An IPO is expected by the end of the year. ACWA and Citigroup declined to comment and the other banks did not immediately respond to Reuters requests for comments. The sources declined to be identified because the information is not public.

The firm could become one of the main beneficiaries of Saudi Arabia’s effort to develop its power industry, particularly renewable energy. ACWA’s CEO told Reuters last month that it expects to submit tenders for projects this year worth $4.5 billion in Saudi Arabia and will also target projects in Morocco and the United Arab Emirates.

Saudi Arabia wants to diversify its energy mix by using renewables, for example, and by partnering with the private sector. The ministry of energy’s government renewable office plans to tender 3,200 megawatt (MW) of solar photovoltaic projects and 800MW of wind projects.

According to its own figures, ACWA Power’s portfolio generates more than 22 gigawatts of power, with investments valued at over $30 billion. ACWA has close relations with the Saudi government, with the country’s top sovereign wealth fund, the Public Investment Fund, owning 13.7 per cent indirectly through a subsidiary.

In November 2016, the Public Investment Fund hired HSBC HSBA. L to advise it on a potential purchase of an increased stake in ACWA.

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