ACWA Power Net Profit Hits SAR927 Million in H1 2024

ACWA Power, the world’s largest private water desalination company, has reported a net profit of SAR927 million for the first half of 2024, marking a 36% increase compared to the same period in 2023. The Saudi-listed company announced its consolidated financial results for the six months ending June 30, 2024, highlighting robust growth driven by strategic project expansions and operational efficiency.

Context and Background

ACWA Power, listed on the Saudi Stock Exchange (Tadawul), is a global leader in power generation, water desalination, and green hydrogen. The company’s performance is closely tied to Saudi Arabia’s Vision 2030, which aims to diversify the economy and promote sustainable development. The first half of 2024 saw ACWA Power continue its expansion, adding a record 10.5GW of renewable power generation capacity to its portfolio, reinforcing its role in the global energy transition.

Key Details

The financial results revealed that operating income before impairment losses and other expenses reached SAR1,389 million, an increase of SAR100 million year-on-year. A significant contributor was a SAR402 million gain from the partial divestment of the Bash and Dzhankeldy wind projects in Uzbekistan. During the period, ACWA Power signed a Power Purchase Agreement (PPA) with the National Electric Grid of Uzbekistan for the up to 5GW Aral Wind with BESS project, Central Asia’s largest wind farm and ACWA Power’s 15th project in Uzbekistan. In June, three PPAs were signed for large-scale PV solar projects in Saudi Arabia with a combined capacity of 5.5GW and an aggregate investment cost of SAR12.3 billion, as part of the fourth round of the ACWA Power-Public Investment Fund (PIF) Strategic Framework Agreement.

ACWA Power CEO Marco Arcelli commented, “Our financial results renew our confidence in pursuing our ambitious growth agenda and allow us to accelerate our mission of delivering low-cost and responsible water and power globally.” CFO Abdulhameed Al Muhaidib added, “Despite the operational challenges witnessed in few assets, the diversity of our asset base as well as our business model has allowed us to grow our operating and net profit in the first six months of this year.”

Furthermore, ACWA Power successfully reached financial close on three major projects: the Taiba and Qassim Combined Cycle Gas Turbine (CCGT) projects in Saudi Arabia and the Hassyan IWP project in the UAE, with a total investment of SAR18 billion.

Implications and Impact

ACWA Power’s strong financial performance underscores its pivotal role in advancing renewable energy and water desalination projects both regionally and globally. The company’s projects in Uzbekistan and Saudi Arabia contribute to energy security and sustainability, aligning with global efforts to combat climate change. The substantial investments in renewable capacity and the successful financial close on major projects demonstrate ACWA Power’s ability to execute complex, large-scale initiatives, reinforcing its reputation as a reliable partner in the energy sector.

Vision 2030 Alignment

ACWA Power’s achievements are a testament to Saudi Arabia’s Vision 2030, which seeks to transform the Kingdom into a global hub for renewable energy and sustainable development. By leading initiatives like the ACWA Power-PIF Strategic Framework Agreement and expanding its renewable portfolio, ACWA Power is directly contributing to the diversification of Saudi Arabia’s economy, reducing dependence on oil, and fostering international cooperation. The company’s growth not only enhances the Kingdom’s economic resilience but also positions Saudi Arabia as a key player in the global transition to clean energy.

20 Questions

Q1. What is ACWA Power’s net profit for the first half of 2024?

A1. ACWA Power reported a net profit of SAR927 million for the first half of 2024, representing a 36% increase compared to the same period in 2023.

Q2. How much did operating income before impairment losses reach?

A2. Operating income before impairment losses and other expenses reached SAR1,389 million, an increase of SAR100 million year-on-year.

Q3. What was the gain from the partial divestment in Uzbekistan?

A3. ACWA Power reported a SAR402 million gain from the partial divestment of its Bash and Dzhankeldy wind projects in Uzbekistan.

Q4. How much renewable capacity did ACWA Power add in H1 2024?

A4. The company added a record 10.5GW of renewable power generation capacity to its portfolio during the first half of 2024.

Q5. What agreement was signed for the Aral Wind project?

A5. ACWA Power signed a Power Purchase Agreement with the National Electric Grid of Uzbekistan for the up to 5GW Aral Wind with BESS project, Central Asia’s largest wind farm.

Q6. How many projects does ACWA Power have in Uzbekistan?

A6. The Aral Wind project is ACWA Power’s 15th project in Uzbekistan.

Q7. What solar projects were signed in Saudi Arabia?

A7. Three PPAs were signed for large-scale PV solar projects with a combined capacity of 5.5GW and an aggregate investment cost of SAR12.3 billion.

Q8. What is the ACWA Power-PIF Strategic Framework Agreement?

A8. It is a partnership between ACWA Power and the Public Investment Fund to develop renewable energy projects in Saudi Arabia, with the solar projects being part of its fourth round.

Q9. What did CEO Marco Arcelli say about the results?

A9. CEO Marco Arcelli stated that the financial results renew confidence in pursuing the growth agenda and accelerate the mission of delivering low-cost and responsible water and power globally.

Q10. What did CFO Abdulhameed Al Muhaidib attribute the growth to?

A10. CFO Abdulhameed Al Muhaidib attributed the growth to the diversity of the asset base and business model, which allowed operating and net profit to grow despite operational challenges.

Q11. Which projects reached financial close?

A11. ACWA Power reached financial close on the Taiba and Qassim Combined Cycle Gas Turbine projects in Saudi Arabia and the Hassyan IWP project in the UAE.

Q12. What is the total investment for the three projects that reached financial close?

A12. The total investment for the three projects is SAR18 billion.

Q13. How does ACWA Power’s performance align with Vision 2030?

A13. It supports Vision 2030 by diversifying the economy, promoting renewable energy, and enhancing international cooperation, positioning Saudi Arabia as a leader in sustainable development.

Q14. What is the significance of the Aral Wind project?

A14. It is Central Asia’s largest wind farm and represents a major step in expanding renewable energy capacity in the region, showcasing ACWA Power’s expertise.

Q15. How many gigawatts of solar capacity were signed in Saudi Arabia?

A15. Three solar projects with a combined capacity of 5.5GW were signed in Saudi Arabia.

Q16. What was the investment cost for the solar projects in Saudi Arabia?

A16. The aggregate total investment cost for the solar projects is SAR12.3 billion.

Q17. What does BESS stand for in the Aral Wind project?

A17. BESS stands for Battery Energy Storage System, which enhances the reliability and efficiency of the wind farm.

Q18. How does ACWA Power’s growth benefit the global energy transition?

A18. By adding significant renewable capacity and advancing desalination projects, ACWA Power contributes to reducing carbon emissions and promoting sustainable energy worldwide.

Q19. What operational challenges did ACWA Power face?

A19. The company mentioned operational challenges in a few assets, but the diversity of its portfolio helped mitigate these and achieve growth.

Q20. What is ACWA Power’s role in Saudi Arabia’s energy sector?

A20. ACWA Power is a key player in Saudi Arabia’s energy sector, driving renewable projects and supporting the Kingdom’s goal to become a global leader in clean energy.

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