Saudi wealth fund acquires 15% stake in ACWA Power

Saudi Arabia’s Public Investment Fund (PIF) has acquired a 15.2 percent direct stake in Riyadh-based ACWA Power, which develops, owns, and operates power generation and water desalination plans, the two jointly announced on Wednesday.

PIF already owns a 9.8 percent holding in ACWA Power through its wholly-owned subsidiary Sanabil Direct Investments Company.

Consequently, the sovereign fund has total direct and indirect equity of 25 percent in the company.

“The entire investment will be in the form of a capital increase and the proceeds will be used to support ACWA Power’s growth strategy and investment plan,” the statement said.

ACWA Power has a total of 40 power and/or desalination projects in operation and under construction, and an additional seven power and/or desalination projects in advanced development.  

The PIF has been planning to acquire a stake in ACWA Power since 2016, when it hired HSBC Saudi Arabia to advise on the acquisition. ACWA Power, meanwhile, selected JP Morgan to advise on the potential deal.

Commenting on the investment, a spokesperson for the Public Investment Fund said ACWA Power was “a strategic long-term investment for PIF which has a proven asset base and demonstrated track record of leading innovative projects domestically and internationally.”

Last month, ACWA Power chairman Mohammad Abunayyan told Al Arabiya that the company was likely to float its shares in an initial public offering (IPO) during the second half of 2018.

“The board of directors has decided to list the company’s shares. Financial and legal advisors were hired, and we’re aiming to complete the share sale this year,” he said.