Saudi Arabia’s utility giant ACWA Power has agreed to buy the stakes of France’s Engie in four gas-fired power plants and water desalination facilities in Bahrain and Kuwait for a combined $693 million.
The acquisition, viewed as strategic by the Saudi group, includes an operating capacity of 4.61 gigawatts (GW) of gas-fired power generation and 1.11 million cubic meters per day (m3/day) of water desalination facilities, as well as the related operations and maintenance companies in Kuwait and Bahrain, ACWA Power said on Wednesday.
Under the terms of the agreement, ACWA Power will buy Engie’s minority shares in the four operating assets—one in Kuwait and three in Bahrain.
For Engie, the divestment makes sense as the French utility giant pledged last month “to deliver more green and smart electrons.”
For ACWA Power, the asset acquisition means secured contracted revenue streams which reinforce ACWA Power’s broader strategy to triple its assets under management to $250 billion by 2030, the Saudi company said.
“We consolidate our presence in Bahrain where we are already a reliable supplier of power and water, and we enter Kuwait, where we recently submitted a bid for a large power and desalination plant,” ACWA Power’s chief executive Marco Arcelli said.
ACWA Power, which operates oil and gas power plants and desalination plants in Saudi Arabia and elsewhere in the Middle East, has pivoted to renewable energy and green hydrogen projects in recent years.
Last year ACWA Power signed an agreement to explore Japan’s Itochu co-developing and off-taking ammonia from a green hydrogen project in Egypt that would have an initial capacity of 600,000 tonnes per year of green ammonia.
ACWA Power’s current green hydrogen portfolio includes the participation in Neom Green Hydrogen Project, the world’s largest plant fully dedicated to export, which it is developing together with Air Products and Neom. The developers of the huge project have secured an $8.5 billion financial close and 30-year offtake agreement.
By Tsvetana Paraskova for Oilprice.com
