Acwa Power secures financing for $1bn power plant in Uzbekistan

A syndicate of seven international lenders agreed to provide $750m to fund the project

The successful financial closure of Sirdarya power project validates continued appetite for public-private partnerships and green investments, Paddy Padmanathan, chief executive of Acwa Power said. Victor Besa/ The NationalShow less

Saudi Arabia’s Acwa Power secured financing for a $1 billion power project it is developing in Uzbekistan as part of its strategy to boost its renewable energy portfolio in the Central Asian republic.

A syndicate of seven international lenders including the European Bank for Reconstruction and Development, German Investment Corporation and Standard Chartered Bank will provide $750 million worth of financing for the Sirdarya combined cycle gas-turbine power plant in Uzbekistan, Acwa Power said on Thursday.

Other entities involved in the deal include France’s Natixis, Société Générale, the Opec Fund for International Development and the Bank of China.

“The successful financial closure of Sirdarya CCGT in a challenging operating environment validates continued appetite for public-private partnerships and green investments,” Paddy Padmanathan, president and chief executive of Acwa Power, said.

The 1,500 megawatt project, once completed, is expected to meet 15 per cent of power demand in Uzbekistan and off set 2.2 million tonnes of carbon dioxide emissions each year.

Acwa Power broke ground on the project earlier this year.

Countries across the world are increasingly pivoting towards sustainable sources of energy to reduce emissions and protect the environment under the Paris Agreement, which has been ratified by 190 nations. In the Middle East, Acwa Power and Abu Dhabi’s clean energy company Masdar are developing a number of projects around the world, including in Central Asia.

“This project is yet another example of our commitment to collaborating with governments around the world to satisfy the rising demand for affordable power and water, and we are proud to be supporting Uzbekistan’s decarbonisation efforts and energy transition journey,” Mr Padmanathan said.

Acwa Power operates in 13 countries in the Middle East, Africa and South-East Asia. It has a portfolio of 62 assets with a total investment of $65bn, producing 42 gigawatts of power and 5.8 million cubic metres per day of desalinated water.

The kingdom’s sovereign wealth fund, the Public Investment Fund, is the biggest stakeholder in Acwa Power with a 50 per cent share of the company. The company has eight other stakeholders, including the Saudi Public Pension Agency and the International Finance Corporation, part of the World Bank.

Last year, Acwa Power signed an investment agreement with the government of Azerbaijan to develop a 240 megawatt wind project in the Absheron and Khizi regions of the country last year. The total investment in the project is $300m.

Masdar, which is owned by Abu Dhabi’s strategic investment company Mubadala, is also developing renewable energy projects in Uzbekistan, Kazakhstan, Azerbaijan and Armenia.

The company finalised a financing deal for the development of 100MW solar plant in Uzbekistan last year. International Finance Corporation, Asian Development Bank, the World Bank and others are funding the project.