ACWA Power to Go Public, Expected to Drive RE Boom in Saudi Arabia

Oct 8, 2021 12:49 PM ET
  • The power manufacturer, which will certainly be 44% had by Saudi Arabia's sovereign wide range fund after the IPO, said it'll offer shares at 56 riyals ($14.93) each after institutional part of the offering finished.
  • It will certainly elevate $1.2 billion for ACWA as well as value the firm at $10.9 billion.

Saudi Arabia's ACWA Power shares will certainly debut on the primary market of the Saudi Stock Exchange on Monday, October 11, according to a bourse declaring, which is anticipated to equate right into a bigger push for renewables in the Kingdom.

The energy developer announced a global going public (IPO) plan in September, aiming to increase USD 1.2 billion, the greatest offering in Riyadh since the listing of Aramco.

The power manufacturer finished the institutional book-building process for its IPO, obtaining bids worth 248 times what it is releasing, according to a declaring on the Tadawul stock exchange. The firm drew orders of SR1.127 trillion ($300.4 billion) from institutional investors, to which it is alloting 90 percent of the 81.2 million shares available, said Riyad Resources, Citigroup Saudi Arabia, JP Morgan Saudi Arabi as well as NATIXIS, the economic advisors, lead managers, bookrunners and underwriters for the IPO.

Half-owned by the Kingdom's Public Investment Fund, the company is offering 81.2 million shares at SR56 each or an 11.1 percent stake. The institutional tranche, that makes up 90 percent of the IPO, was 248 times oversubscribed, bring in SR1.127 trillion.

ACWA is transforming itself for reduced carbon manufacturing as well as asserted to double its power production outcome over the next 5 years, with renewables making up a majority share.

In April this year, ACWA Power has announced the opening of a utility-scale solar renewable energy project in the country. The 300MW Sakaka PV independent power manufacturer (IPP), which was constructed with an investment of SAR1. 2bn ($319m), was ushered in by Crown Prince Mohammed bin Salman of Saudi Arabia.

In August, the firm announced the economic close for the 1500 MW Sudair Solar plant, the biggest PV station in Saudi Arabia. It is a key project under the Public Investment Fund (PIF) renewable energy program that intends to sustain the nation's recurring power shift and diversity, and also to deliver 70% of the nation's renewable energy under the National Renewable Energy Program (NREP).

ACWA has also revealed that at the beginning of 2022, the company will issue eco-friendly bonds for funding its renewable energy projects. It already has actually 5 projects accredited for green finance, which with each other will certainly call for around $10 billion in funding.

Furthermore, this year, the Crown Prince revealed a campaign to have 50% of electricity generation from renewables in Saudi Arabia. The kingdom also prepares to reach 58.7 GW of advancing renewable energy capability by 2030 and also 27.3 GW by 2024. This signals a turn in the direction of renewables taken by Middle East superpowers, of which exports are controlled by oil. ACWA will aid establish 70% of projects in Saudi Arabia. Whether the country can deliver on is energy improvement plan will be noted worldwide, yet it does seem that ACWA will play a vital role in the upcoming initiatives towards power change, particularly following its IPO.

The stock will have plus/minus 30 percent daily rate fluctuation limits and plus/minus 10 percent static cost change limits, according to a declaration on the Saudi Securities Market (Tadawul).

These fluctuation limits will certainly be used during the very first three days of listing, as well as from the 4th trading day onwards, the everyday rate variation limits will certainly go back to plus/minus 10 percent and also the fixed rate variation limits will certainly no longer use.

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