The kingdom has an ambitious renewables strategy and plans to add 60GW of clean energy capacity to grid by 2030 Reuters
The kingdom has an ambitious renewables strategy and plans to add 60GW of clean energy capacity to grid by 2030 Reuters

Acwa Power wins inaugural solar project in Saudi Arabia



Saudi Arabia's Acwa Power won the kingdom’s first utility-scale solar photovoltaic plant, as the world’s largest oil exporter kick starts its renewables programme to free up more crude for export.

Paddy Padmanathan, chief executive of the Riyadh-headquartered firm said it had won the bid for the 300 Megawatt project at Sakaka, in the northern Al Jouf area at “a new world record tariff” of US Cents 2.3417/kWh (8.781 halalas/kWh).

The kingdom, which meets its power requirements by burning oil and is increasingly pivoting to natural gas has made a recent move towards renewables to meet its rising demand for electricity. The oil producer’s newly-established Renewable Energy Project Development Office (Repdo) said last month it would tender 3.25 Gigawatts of solar power and 800MW of wind capacity this year, as the kingdom works towards meeting an ambitious target of deploying 9.5GW of renewables capacity by 2023.

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Read more:

More renewable projects in the pipeline for GCC countries in 2018

Saudi Arabia shortlists bidders for first solar power project

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The US$302 million Sakaka plant will be developed on the basis of an independent power producer model and is backed by a 25-year power purchase agreement with the Saudi Power Procurement Company.

In January about eight international and local developers submitted bids for Saudi Arabia's inaugural renewables round, with Repdo shortlisting Acwa Power and Japan's Marubeni. In an interview with The National last month Turki Al Shehri, the head of Repdo, said the project would reach financial closure in February and target commissioning by August 2019.

Last year the kingdom tendered a 400MW wind project - its first - at Dumat Al Jandal, for which Repdo pre-qualified companies in 2017.

Acwa Power, which develops conventional and renewables projects across the Middle East is considering listing on the domestic capital markets as well as an international exchange in 2018.

In an interview in December, Mr Padmanathan said Acwa Power has an “adequate enough operating portfolio that can generate that dividend stream” as it prepared to file for listing.

Recent reports have suggested that Saudi Arabia’s sovereign wealth fund, the Public Investment Fund may pick up a 10 per cent stake in the developer ahead of its public listing.

Acwa Power is set to invest around US$4bn, as part of its capex spend, on renewable energy projects in Dubai, Jordan, Egypt and Morocco next year, with 80 per cent of the cost to come from debt and the rest from equity.

Dubai Bling season three

Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed 

Rating: 1/5

Match info

Deccan Gladiators 87-8

Asif Khan 25, Dwayne Bravo 2-16

Maratha Arabians 89-2

Chadwick Walton 51 not out

Arabians won the final by eight wickets

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Countdown to Zero exhibition will show how disease can be beaten

Countdown to Zero: Defeating Disease, an international multimedia exhibition created by the American Museum of National History in collaboration with The Carter Center, will open in Abu Dhabi a  month before Reaching the Last Mile.

Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.

 

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.”

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