ACWA Power becomes cornerstone of Saudi Arabia's energy transition policy
A key player in Vision 2030’s energy transformation
Saudi Arabia’s Vision 2030 is redefining its economy and
energy mix, aiming to reduce reliance on oil and become a global leader in
renewables and sustainable infrastructure. At the forefront of this effort is ACWA
Power, a Saudi multinational energy company that has positioned itself as a
cornerstone of the Kingdom’s ambitious transition.
Through a strategic focus on gas and solar energy, ACWA
Power is capitalizing on national goals, leveraging strong financial backing
and long-term contracts. For investors, the company offers an appealing balance
of growth, policy alignment, and stable returns in an evolving energy market.
Gas and solar: A dual-pillar strategy
ACWA Power is strategically developing both gas and solar
projects to balance short-term energy reliability with long-term sustainability.
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The recent financial close of two 1,800 MW Combined Cycle
Gas Turbine (CCGT) plants—Rumah-1 and Al-Nairyah-1—marks a major step forward.
These projects are supported by a $3.4 billion non-recourse loan from a
consortium including KEXIM, Saudi National Bank, and Chinese state banks.
Ownership is split between ACWA Power (40%), Saudi Electricity Company (SEC)
(35%), and KEPCO (25%). Notably, the plants are designed to be carbon
capture-ready, aligning with Saudi Arabia’s net-zero ambitions and opening
future opportunities in carbon credit markets.
Simultaneously, ACWA Power is aggressively expanding solar
capacity. The company recently secured SR31 billion ($8.3 billion) in funding
for seven solar and wind projects totaling 15,000 MW. Flagship projects like
the 3,000 MW Bisha and Humaij solar plants, located in Asir and Madinah, are
part of the National Renewable Energy Programme and will be operational by 2028.
The financing—backed by the Public Investment Fund (PIF) and international
lenders—demonstrates high confidence in Saudi Arabia’s energy roadmap.
De-risked financing and predictable returns
ACWA Power’s energy projects are underpinned by a mature
financial model. Take the Qurayyah CCGT project, a 3 GW plant in the Eastern
Province with a 50-year PPA signed in February 2025. With a $3.57 billion
investment shared between ACWA Power, SEC, and Haji Abdullah Alireza & Co.,
the project offers low-risk, long-term returns. Its carbon capture readiness
also ensures resilience amid future regulatory changes.
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2030
These long-term agreements, combined with multi-source
funding from export credit agencies and regional banks, protect against market
volatility—making ACWA Power a particularly appealing option for conservative
and institutional investors.
Global partnerships and ESG alignment
ACWA Power’s global partnerships further enhance its
investment appeal. The company’s collaboration with GE Vernova, involving a $14.2
billion initiative in Saudi Arabia, underscores international confidence in the
Kingdom’s energy sector. Its growing ties with Europe and China, including the Yanbu
Green Hydrogen Hub, reflect ACWA’s evolution into a key player in the global
energy corridor.
Beyond technology and scale, ACWA Power is strengthening its
ESG profile. The company has pledged to plant one million trees by 2030 under
the Saudi Green Initiative, and has already trained over 15,000 students via
its Energy and Water Academy —demonstrating a strong commitment to social and
environmental impact.
Investor takeaways
ACWA Power stands out for its strong policy alignment,
de-risked financial structures, and international partnerships—offering a
compelling entry point into one of the world’s fastest-transforming energy
markets.
Key Highlights:
1. Long-Term PPAs: Up to 50 years of predictable cash flow.
2. Diversified Funding: Involvement of local, regional, and
global financial partners ensures resilience.
3. Regulatory Tailwinds: Strong government backing through
Vision 2030 and net-zero commitments.
4. Strategic Global Collaborations: Partnerships with
industry leaders like GE Vernova and Chinese state entities fuel innovation and
scalability.
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Conclusion
ACWA Power is more than just a participant in Saudi Arabia’s
energy transition—it is a driver of change. Its twin focus on gas and solar,
paired with deep financial and institutional support, marks it as a rare blend
of stability and growth potential. For investors looking to align with the next
chapter of global energy development, ACWA Power offers a strategic,
future-proof foothold in a transforming market.
Source: www.ainvest.com
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