ACWA Power’s Strategic Acquisition in Kuwait and Bahrain
In a significant move to bolster its presence in the Gulf region, Saudi Arabia’s ACWA Power has announced a $693 million agreement to acquire substantial stakes in power generation and water desalination assets from French utility developer ENGIE. This strategic acquisition marks ACWA Power’s inaugural entry into the Kuwaiti market and reinforces its established operations in Bahrain.
Details of the Acquisition
The transaction encompasses a total operational capacity of 4.61 gigawatts (GW) of gas-fired power generation and 1.11 million cubic meters per day of water desalination. Specifically, ACWA Power will acquire:
- Kuwait: An 18% stake in the Az Zour North Independent Water and Power Project (IWPP).
- Bahrain: A 45% stake in both the Al Ezzel Independent Power Project (IPP) and the Al Dur IWPP, as well as a 30% stake in the Al Hidd IWPP.
In addition to these assets, the acquisition includes the related operations and maintenance companies, namely a 50% stake in Az Zour North O&M Company and full ownership of Al Ezzel O&M Company.
Strategic Implications
This acquisition aligns with ACWA Power’s strategic objective to expand its footprint in the Middle East’s energy and water sectors. By entering the Kuwaiti market, ACWA Power positions itself to capitalize on new opportunities, including a recent bid submission for a large-scale power and desalination plant in the country. The consolidation of assets in Bahrain further solidifies the company’s role as a reliable supplier of power and water in the region.
Marco Arcelli, CEO of ACWA Power, emphasized the significance of this move, stating, “This acquisition represents a pivotal milestone for ACWA Power, reinforcing our position as a global leader in water desalination. 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 … .”
Financial and Operational Impact
The acquired assets are fully operational and well-maintained, ensuring immediate revenue generation for ACWA Power. The secured, contracted revenue streams from these assets are expected to contribute positively to the company’s financial performance, aligning with its broader strategy to triple its assets under management to $250 billion by 2030.
Thomas Brostrom, Chief Investment Officer of ACWA Power, highlighted the strategic expansion, noting, “By making its inaugural entry into the Kuwaiti market through the acquisition of a stake in the Az-Zour North Facility, ACWA Power has achieved a significant milestone in its strategic efforts to expand its presence within the regional energy and water desalination sector.”
Next Steps
The completion of this transaction is subject to customary regulatory approvals and other stakeholder consents. Upon finalization, ACWA Power will integrate these assets into its existing portfolio, enhancing its operational capabilities and service delivery in both Kuwait and Bahrain.
This strategic acquisition not only expands ACWA Power’s geographical footprint but also reinforces its commitment to providing reliable and sustainable energy and water solutions in the Gulf region.
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