Saudi Arabia-based power plants developer ACWA Power International is reportedly looking to raise close to $1 billion through a Sukuk issue early next year.
A Sukuk is a sharia-compliant bond-like instrument used in Islamic finance that involves a direct asset ownership interest, while bonds are indirect interest-bearing debt obligations.
ACWA Power, which is partially owned by the kingdom’s sovereign wealth fund, Public Investment Fund (PIF) has appointed the Saudi unit of HSBC and Riyadh-based investment management firm, Samba Capital to guide on the issuance.
ACWA Power is expected to use the proceeds from the Sukuk issuance to partly fund its $8 billion purchase of gasification and power assets at Jazan on Saudi Arabia’s west coast.
One of the largest developers of power plants in the Middle East, ACWA Power will follow-up the issuance with an Initial Public Offering (IPO) in Tadawul, the Saudi Stock Exchange which is expected to raise as much as $1 billion and value the company at about $8 billion.
Acwa, HSBC and Samba Capital are yet to respond to the report.
Last week, the Saudi sovereign wealth fund, PIF decided to raise its stake in ACWA to 50 percent in line with the kingdom’s plans to develop its renewable-power industry.
Riyadh-based ACWA Power is a developer, investor, co-owner and operator of a portfolio of power generation and desalinated water production plants currently with a presence in 10 countries including in the Middle East and North Africa, Southern Africa and Southeast Asia regions.
Acwa is also working closely with US-based Air Products & Chemicals, an industrial gases company to construct a $5 billion plant as part of Saudi Arabia’s Neom Project which will use solar panels and wind turbines to create hydrogen.