• BUSINESS •
PA D DY PA D M A N AT H A N
26
POWER SHIFT
Paddy Padmanathan, President and CEO of ACWA Power, has just led the energy company through an IPO. Now he’s managing a packed pipeline as the company plays an important role in Saudi Arabia’s path to renewables. It’s been a busy year for Tadawul. As of November 2021, Saudi’s stock exchange had already seen eight IPOs so far in 2021. This includes the successful October listing of the kingdom’s International Company for Water and Power Projects (ACWA Power). “The listing is to get support from the public and challenge ourselves to keep delivering better,” says Paddy Padmanathan, President and CEO of ACWA Power. “Now, we do not just have 10 shareholders, but 1.35 million.” ACWA Power initially floated an 11.1% stake for $1.2 billion, valuing it at around $10.9 billion. As the IPO picked up pace, its share price jumped by 30% above its listing price on the first day of trading. Its market cap had hit nearly $15 billion as of November 2, 2021. The company was initially founded as a joint venture (JV) with the MADA Group for Industrial and Commercial Development in 2004, under the name of ACWA Power Projects, to develop and operate power and water desalination plants in Saudi Arabia, both in fossil fuel and renewable technologies. Today, ACWA Power’s portfolio spans the GCC, Egypt, Ethiopia, Morocco, South Africa, Turkey, Uzbekistan, Azerbaijan, and Vietnam. It has 64 projects in operation, construction, or advanced development, with a total value of $66 billion. In total, these projects generate
41.6GW of power and produce 6.4 million cubic meters per day of desalinated water. Saudi’s Public Investment Fund (PIF) holds a 44.2% stake in the company, while investment holding company Vision International Investment owns 22.8%, and Al Rajhi Holding owns 11.2%. Now, as global conversations drive a transformation in future energy provision, it is currently aligning with an increasingly urgent trend towards renewables and away from fossil fuels. The IPO came as Saudi was on the cusp of making a significant commitment to sustainability, with Crown Prince Mohammed bin Salman announcing less than two weeks later that the kingdom plans to reach netzero carbon emissions by 2060. Before that, Saudi plans to generate 50% of its energy from renewables by 2030, with PIF developing 70% of this renewable energy capacity. ACWA Power is set to play a big role by developing $30 billion of renewable projects with Aramco and PIF by 2030. “Saudi Arabia depends mainly on gas and oil with a little exposure to renewables. The country now has a plan to grow from nearly zero to generate around 60 gigawatts from renewable energy by 2030,” explains Soha Saniour, Associate Director at Arqaam Capital. “70% of this target will be co-developed by ACWA Power while it can take part in the remaining 30% of
BY NERMEEN ABBAS F O R B E S M I D D L E E A S T.C O M
NOVEMBER 2021
