Acwa signs power purchase deal for South Africa's hybrid renewable energy project

Located in Northern Cape province, Project DAO is currently under construction with a total cost of nearly $800 million

Acwa Power reported a 22 per cent increase in third-quarter revenue. Ruel Pableo / The National
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Saudi Arabia's Acwa Power has signed a power purchase agreement for South Africa's largest hybrid dispatchable renewable power project to bolster its green energy portfolio.

Project DAO, with a total cost of nearly $800 million, is currently under construction and its investor consortium includes Acwa Power as the lead developer, Thebe Investment Corporation and Aventro Investments.

“It will be one of the largest hybrid investments in the South African renewable energy sector,” Acwa Power said in a statement on Monday.

Located in Northern Cape province, the plant will be equipped with the “largest solar photovoltaic installation in the country of 442 megawatts”, the statement said. It added that the plant would offer 1,200 megawatt hours of battery storage, one of the largest in the world.

Operation is expected to commence by the second quarter of 2026.

Project DAO is set to be yet another Acwa Power flagship project in South Africa, following the success of the Bokpoort and Redstone CSP projects, in offering clean energy to the country,” said Marco Arcelli, chief executive of Acwa Power.

The project is expected to generate more than 1,000 construction jobs at peak, with about 25 per cent coming from the local community.

Acwa Power, which is backed by the Public Investment Fund, has operations in 12 countries across the Middle East, Africa, Central Asia and South-East Asia.

Its portfolio includes 77 projects in operation, advanced development and construction, with an investment value of $82.8 billion. In total, its portfolio of projects have the capacity to generate 53.69 gigawatts of power and manage 7.6 million cubic metres of desalinated water a day.

In October, the company signed agreements worth $746 million for the development of clean energy projects.

The deals included a $500 million initial agreement with EIG, an energy-focused institutional investor, to co-operate in sectors such as power generation, water desalination and green hydrogen, with a focus on investing in projects in Gulf countries and Uzbekistan.

It also signed funding agreements worth $246 million with the European Bank for Reconstruction and Development and the Opec Fund for International Development for the development of a 240MW wind power project in Azerbaijan.

Last month, the private utility reported a more than 16 per cent increase in its third-quarter net profit as a result of higher revenue as new projects came online.

Net profit after zakat for the three months to the end of September climbed to 397.94 million Saudi riyals ($106.08 million), the company said in a filing on to the Tadawul stock exchange, where its shares are traded.

Revenue during the period surged more than 22 per cent annually to 1.54 billion riyals and operating profit rose nearly 25 per cent to 814.2 million riyals.

Updated: December 18, 2023, 4:43 PM