Saudi’s PIF raises stake in ACWA Power to support energy sector

By Rahul Vaimal, Associate Editor
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Saudi Arabia
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The sovereign wealth fund of Saudi Arabia, Public Investment Fund (PIF) said that it has raised its stake in Riyadh-based ACWA Power from 33.6 percent to 50 percent as part of its efforts to support Saudi Arabia’s renewable energy sector.

ACWA Power is preparing an initial public offering (IPO) and leading a consortium to develop and operate renewable energy-based utilities in the Red Sea tourism flagship project in Saudi Arabia.

The fund said in a statement, “We believe that ACWA Power will play a significant role in both driving and diversifying economic growth in the future – while also providing an enduring commercial return for the people of the kingdom.”

Mohammad Abunayyan
Mohammad Abunayyan
ACWA Power

“The additional investment by the Public Investment Fund is a commitment to enabling national champions such as ACWA Power and a vote of confidence in our ability to deliver sustainable, resilient growth without compromising environmental stewardship, social responsibility and good governance.”

The chief executive of ACWA Power told that the company expects to achieve its target of new investments of more than $10 billion this year as the coronavirus pandemic had a “minimal impact” on its ventures.

Chief Executive Paddy Padmanathan said that the company, which had postponed its IPO plans two years ago, is still committed to a planned IPO, however, execution would depend on the correct timing and market conditions.

The stake increase by the PIF was expected after Yasir al-Rumayyan, the head of Saudi PIF, said last year it planned to increase its stake in ACWA Power to 40 percent from 29.28 percent.

The PIF, which manages funds worth $360 billion, is following a two-pronged strategy to develop a foreign investment portfolio and to invest locally in projects that will help to minimize Saudi Arabia’s dependence on oil.

This week a US regulatory filing revealed that the PIF has cut its exposure to North American equities in the third quarter by $3 billion, discharging some exchange-traded funds (ETF) and stocks.

ACWA currently runs in 10 countries in its position as a developer, investor and operator of power generation and water production plants. It produces 37.7 GW of power and 5.8 million cubic meters of desalinated water on a daily basis.