A Saudi Acwa Power-generating windmill is pictured in Jbel Sendouq, on the outskirts of Tangier, Morocco. Saudi Arabia’s sovereign wealth fund has increased its stake in Acwa Power. 
A Saudi Acwa Power-generating windmill is pictured in Jbel Sendouq, on the outskirts of Tangier, Morocco. Saudi Arabia’s sovereign wealth fund has increased its stake in Acwa Power. 

Economy

Saudi Arabia’s sovereign wealth fund increases stake in Acwa Power

The fund previously held around 9.8 per cent shareholding in the company through one of its subsidiaries

Jennifer Gnana
Jennifer Gnana

July 05, 2018

Saudi Arabia’s sovereign Public Investment Fund has increased its stake in Riyadh-based renewables developer Acwa Power, the companies said in an statement.

PIF’s total stake in Acwa Power is now close to 25 per cent, with its latest 15.2 per cent direct stake in addition to its existing 9.78 per cent stake through its wholly-owned subsidiary Sanabil Direct Investments Company, the firms said in a statement on Thursday. Acwa Power’s chairman Mohammad Abunayyan confirmed that PIF’s offer was made in early 2017.

“The PIF reinforces what is already a high-quality institutional shareholder base which includes the Public Pension Agency of Saudi Arabia and World Bank’s International Finance Corporation,” Mr Abunayyan said.

The investment by the Saudi sovereign fund in one of the largest regional renewables developer comes amid a rollout of a renewables programme by the world’s biggest oil exporter. Saudi Arabia is expected to tender over 4GW of solar and wind projects as it looks to free up more crude for export and diversify its economy further.

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Read more:

Saudi Arabia's Acwa Power is keen on IPO to fund company's growth, CEO says 

Middle East renewables sector to register 24% CAGR by 2025, says GE

Saudi Arabia's first wind project receives four bids

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PIF’s investment will come in the form of a capital increase, with the proceeds to be spent on Acwa Power’s growth strategy and investment plans, the companies said.

HSBC advised PIF on the deal, while JP Morgan acted as the sole financial advisor for the renewables firm.

Acwa Power has developed projects across the Middle East, including the fourth phase of the Shaikh Mohammed bin Rashid Solar Park, as well as renewables schemes in Jordan. The company is also taking a leading role in the alternative power generation sector in Saudi Arabia as well.

An Acwa Power-led consortium was chosen to develop Saudi Arabia’s first-ever solar plant, a $302 million facility at Sakaka, which is being developed on the basis of an independent power producer model.

The developer is also bidding for the kingdom’s first wind project, a 400MW scheme in the northern Dumat Al Jandal region.

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The specs
 
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
Honeymoonish
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SPECS
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UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

The specs

Engine: 3-litre twin-turbo V6

Power: 400hp

Torque: 475Nm

Transmission: 9-speed automatic

Price: From Dh215,900

On sale: Now

The bio

His favourite book - 1984 by George Orwell

His favourite quote - 'If you think education is expensive, try ignorance' by Derek Bok, Former President of Harvard

Favourite place to travel to - Peloponnese, Southern Greece

Favourite movie - The Last Emperor

Favourite personality from history - Alexander the Great

Role Model - My father, Yiannis Davos

 

 

MATCH INFO

Southampton 0
Manchester City 1 (Sterling 16')

Man of the match: Kevin de Bruyne (Manchester City)

The stats

Ship name: MSC Bellissima

Ship class: Meraviglia Class

Delivery date: February 27, 2019

Gross tonnage: 171,598 GT

Passenger capacity: 5,686

Crew members: 1,536

Number of cabins: 2,217

Length: 315.3 metres

Maximum speed: 22.7 knots (42kph)

Emergency

Director: Kangana Ranaut

Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry 

Rating: 2/5