Acwa Power signs deals worth $12bn to develop Uzbekistan energy projects

Saudi utility plans to develop the largest single onshore wind project in the world, with a total capacity of 1.5 gigawatts

A Saudi Acwa Power wind turbine in Morocco. Reuters

Saudi Arabia’s Acwa Power has signed agreements worth $12 billion to develop three new energy projects in Uzbekistan, as the Riyadh-based utility continues to expand its portfolio.

The deals include a "heads of terms agreement" to develop the largest single onshore wind project in the world in the Karakalpakstan region of Uzbekistan with a total capacity of 1.5 gigawatts, and a $10bn investment co-operation agreement to jointly develop gas-to-power, renewable energy and green hydrogen projects in Uzbekistan.

Acwa Power is also teaming up with New York-listed industrial gases company Air Products to invest in a green hydrogen project in the central Asian republic, it said in a statement on Thursday.

“We have outstanding partners in Acwa Power, which is already implementing four energy projects in Uzbekistan, meaning these new ventures are based on a strong foundation of partnership and trust,” said Azim Akhmedkhodjaev, Uzbekistan's first deputy minister of energy.

The new agreements come as Acwa Power continues to expand its global portfolio. Earlier this year, the company said it was teaming up with Oman’s OQ energy company and Air Products to create a multi-billion-dollar green hydrogen-based ammonia production unit in Oman's Salalah free zone. It is also leading a consortium to develop a 1.1-gigawatt wind project worth $1.5bn in Egypt.

"Uzbekistan is at the forefront of energy transition in central Asia, and these key agreements with the country’s Ministry of Investments and Foreign Trade and Ministry of Energy, make Uzbekistan Acwa Power’s second-largest country for overall investment," said Mohammad Abunayyan, chairman of Acwa Power.

The Karakalpakstan project is expected to achieve a financial close by the end of 2023 and will be fully commissioned by the first quarter of 2026, the statement said.

When complete, it will power 1.65 million households and contribute 19 per cent to Uzbekistan’s overall renewable energy goals.

The central Asian republic is targeting 8 gigawatts and 12 gigawatts of solar and wind capacity by 2026 and 2030, respectively.

Saudi Arabia's sovereign wealth fund, the Public Investment Fund, is the biggest shareholder in Acwa Power, with a 50 per cent stake. It also has seven other stakeholders, including the Saudi Public Pension Agency.

The company raised $1.2bn from its listing last year, making it one of the biggest share sales in the energy space after Saudi Aramco's initial public offering on the Tadawul in 2019, which raised a record $29.4bn.

The new deals were signed during Uzbekistan President Shavkat Mirziyoyev's visit to Saudi Arabia on Thursday.