ACWA Power is expecting to close deals on 5-8 projects in China next year. This was disclosed by its Chief Executive, while revealing the company’s 2030 strategy at the Capital Markets Day virtual event.
Marco Arcelli, CEO, ACWA Power, said, “We see a very good pipeline of opportunities in 2024-2025 (in China) and hope that we would be announcing the first deal shortly. We have short listed five to eight projects that could come to conclusion next year”.
He said, “Due diligence is underway on identified solar/wind projects worth 2-4 gigawatts (GW), green hydrogen projects for approximately 0.3 MTPA (metric tons per annum) and water projects for 0.3 MCM/day (million cubic meters per day) in China.
Motivating factors include strong government to government relationships, and targets set by local Chinese provinces to attract foreign direct investment, and emphasis on decarbonisation.”
Arcelli said, “A foothold in Chinese market would enable the company to achieve its ambitions with just 10 countries which otherwise would have needed 40 countries to achieve.”
The CEO said, “The tariff in China is not necessarily fixed but readjusted based on avoided cost and this needs to be assessed before choosing projects, but overall, the market provides ‘very interesting free cash flows and returns compared to other markets.”
With its aim to triple assets under management to $250 billion by 2030, ACWA Power plans to focus on four regions – Saudi Arabia, Middle East and Africa, Central Asia and Southeast Asia and China, according to the new strategy.
“Saudi Arabia will continue to attract 50-60 percent of the company’s investments,” he said, adding that ACWA Power is responsible for delivering the Public Investment Fund’s renewable energy targets. The PIF is targeting about 42 GW of renewable generation by 2030, about 70 percent of the country’s total.
“We won 1.1 GW of MoE (Ministry of Energy) tenders to date and 5.5 GW is at bid or RFP (request for proposal stage) pending decision shortly”, he said.
“The company has invested $8.7 billion in Central Asia, the largest outside Saudi and the UAE. We continue to develop organically, but for Africa and Southeast Asia particularly, we would increasingly look for acquisitions if they are available at the right price because some of these regions are very small, fragmented, and slow,” he said.
He said, “The company will focus on four technologies – renewables, green fuels, flexible generation, and water desalination. Battery storage is mostly connected to renewable generation but in some countries selectively there might be an opportunity to pursue standalone battery storage projects.”
The CEO further pointed out that the company is exploring a green hydrogen project pipeline of 3 MTPA (metric tonnes per annum) in Saudi Arabia, Egypt, Indonesia, South Africa, Morocco, Oman, Tunisia, China, Thailand, the UAE, and Uzbekistan.
