ACWA Power increased bond size to meet demand: chairman

ACWA Power International increased the size of its bond issuance to $814 million from $600 million to meet strong demand from foreign investors— particularly from North America and Europe, Chairman Mohammad Abunayyan told Argaam.

The fixed-rate coupon at 5.95 percent for the international bonds maturing 2039 is a major breakthrough for ACWA, Abunayyan added on the sidelines of the company’s press conference.

The issuance was three times oversubscribed.

ACWA plans to use most of the proceeds in future investments, as well as towards the privatization programs of the Saline Water Conversion Corporation (SWCC) and Saudi Electricity Co. (SEC), and renewable energy projects.

The remaining proceeds will be used in repaying short-term loans.

“We had earlier offered a price and a yield, almost three times higher than the current ones,” Abunayyan said.

He added that ACWA is in talks with the Public Investment Fund (PIF) to increase its stake in the company through its wholly owned subsidiary Sanabil Investments, which currently holds a 12 percent of the utility’s capital.

Answering a question about ACWA’s plans to list shares in the Saudi market, Abunayyan said: “The move is part of the company’s long-term plan, however no decision has been yet taken on the timing.”

The Riyadh-based company is investing in mega projects across ten different markets around the world. It is planning to break into three new markets in Africa and Central Asia.

ACWA is still in talks to set up two renewable energy plants and a gas-fueled power plant in Egypt. It will also bid over the next two months for new solar and wind projects in the Kingdom, Abunayyan added.