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Acwa Power widens equity gap in power developer league

2 October 2023

 

The equity gap between Saudi utility developer Acwa Power and the other private utility developers in the GCC region has continued to widen, according to MEED’s annual GCC power developer ranking.

Acwa Power’s net capacity reached 13,340MW. This has doubled its lead to 67 per cent over France’s Engie, whose net capacity of 7,987MW has remained unchanged.

Over the past 12 months, power-purchase agreements were signed for six solar independent power producer (IPP) projects, as well as for a multi-utility public-private partnership contract and a cogeneration plant.

The seven contracts have a total combined power generation capacity of more than 8,000MW.

Acwa Power gained more than 2,900MW in net capacity over this period. This was due in large part to a 35 per cent equity share in the 2,060MW Shuaibah 2 solar power project and a 50 per cent shareholding in each of the Saad 2, Ar-Rass 2 and Kahfah solar photovoltaic (PV) projects. 

These contracts were procured by the kingdom's Public Investment Fund (PIF) through the Saudi renewable energy price discovery scheme.

Notably, the 600MW Shuaibah 1 solar IPP scheme, which was publicly tendered and awarded to an Acwa Power-led consortium under the second round of the National Renewable Energy Programme (NREP) in 2021, has been combined with the PIF’s Shuaibah 2.

Under the final scheme, which reached financial close this year, Acwa Power’s shares in Shuaibah 1 decreased from 50 per cent to 35 per cent. The shares of its partners Gulf Investment Corporation and Al-Babtain, which originally maintained 30 per cent and 20 per cent, respectively, have been bought by PIF subsidiary the Water & Electricity Holding Company (Badeel) and Saudi Aramco Power Company (Sapco).

As with Engie, the net and gross capacities of Japanese firms Marubeni, Mitsui, Sumitomo and Jera also remained unchanged, with no new contract wins in the period.

Ranked 10th in the previous year’s listing, France’s EDF rose three spots this year to claim seventh place, which was previously held by Korea Electric Power Corporation (Kepco).

EDF’s rise came as a result of winning contracts for two major schemes. It was selected together with South Korea’s Korea Western Power Company (Kowepo) to develop Oman’s 500MW Manah 1 solar IPP project, and was also awarded a multi-utility contract with the UAE’s Abu Dhabi Future Energy Company (Masdar) for the Amaala development in Saudi Arabia, which includes a 250MW solar power farm.

EDF overtook Kepco despite the South Korean firm’s successful bid for the Jafurah cogeneration plant, where it maintains a 60 per cent equity. The scheme’s power generation plant has a capacity of 320MW.

Singapore’s Sembcorp and China’s Jinko Power, which comprise the team that won the Manah 2 solar IPP contract in Oman, occupy the ninth and 10th spots, respectively.

Saudi utility developer Aljomaih Energy & Water Company relinquished its 10th spot last year.

Power tariffs have scope to improve

A different view

Saudi Arabia’s renewable energy price discovery tool is becoming a potential game-changer for the competitive landscape of GCC power developers.

It allows Acwa Power to submit a proposal to match the most recent prices obtained through each round of the NREP public tendering process, which is overseen by the state-backed principal buyer, Saudi Power Procurement Company (SPPC).

Under the price discovery scheme, the PIF will only invite other developers to bid for a contract if Acwa Power fails to match prices achieved through the public tenders.

Acwa Power has so far won all five of these contracts, which have a total combined capacity of 8,110MW.

Since the PIF is tasked with procuring 70 per cent of Saudi Arabia’s 58,700MW renewable energy capacity target by 2030, the Saudi sovereign wealth vehicle is expected to procure a further 32,000MW of renewable capacity over the coming years using the price discovery scheme.

Given the scale of the PIF’s programme, and the extent to which it has expanded Acwa Power’s renewables portfolio this year, a separate league table that includes only IPPs and independent water and power producer (IWPP) projects that have been publicly tendered, or simultaneously tendered to a pool of qualified private utility developers, offers interesting insights.

Excluding the PIF contracts reveals that the ranking of the private utility developers based on their net capacity – or the capacity commensurate to a developer’s equity shareholding in each power generation asset – is unchanged. Acwa Power remains at the top, with a total equity capacity of more than 9,800MW, compared to Engie’s nearly 8,000MW.

However, their gross capacity rankings reverse when the PIF contracts are excluded. Engie leads by 4 per cent in terms of gross capacity, or the total capacity of power plants that they are developing alone or with consortium partners.

Gas revival

No new gas-fired IPP or IWPP projects have been let in the GCC since 2021, when most principal buyers and utilities began to focus on increasing their renewable energy capacity in line with their countries’ decarbonisation agendas.

With the exception of the UAE's Fujairah F3 and Saudi Aramco’s Tanajib and Jafurah cogeneration plants, solar and wind power plants have accounted for the majority of private power generation capacity that has been procured since 2020.

This is set to change in the next 12-24 months as renewed demand for combined-cycle gas turbine (CCGT) plants is driven by the need to decommission old fleets that burn liquid fuel, or to replace expiring baseload capacity.

As of September this year, gas-fired power plants account for approximately 60 per cent of the GCC region's planned power generation plants that are likely to be awarded in the next 24 months, according to MEED research. 

The bid evaluation process is under way for four gas-fired IPPs in Saudi Arabia with a total combined capacity of 7,200MW. These are the first gas-fired IPP schemes to be procured by the kingdom since 2016.

A further three IWPP schemes – Kuwait's Al-Zour North 2 & 3 and Al-Khiran 1 and Qatar’s Facility E – are in the procurement stage. These schemes have a total combined power generation capacity of 6,800MW.

Next year, SPPC is expected to begin the procurement process for two gas-fired IPPs: the PP15 in Riyadh and another in Al-Khafji. Each is expected to have power generation capacity of 3,600MW.

Abu Dhabi’s Emirates Water & Electricity Company (Ewec) is also expected to initiate the procurement process for two CCGT plants with a total combined capacity of 2,500MW before the end of 2023.

Renewable arena

The revival of gas-fired schemes will not necessarily come at the expense of renewables, however.

The region’s largest market has ramped up its issuance of solar and wind tenders over the past 12 months and is expected to sustain or even accelerate the pace of its renewables procurement.

Saudi Arabia needs to procure at least 43,000MW of renewable energy capacity through public tenders and direct negotiations over the next six years to meet its 2030 target. This equates to about 7,200MW a year – twice its current average.

Overall, the future strength of the market for private utility developers is ensured by a growing clientele in Saudi Arabia that includes Neom and its subsidiary Enowa, in addition to the utilities in the other five GCC states, and the large conglomerates and organisations that aim to build captive power plants.

A case in point is the 35,000MW of solar and wind energy projects are in the pre-development stage for Neom, which aims to be powered 100 per cent by renewable energy by 2030.

Abu Dhabi also plans to procure at least 1,500MW of solar PV capacity annually over the next 10 years, in line with its goals for decarbonising its electricity system.

Developers’ dilemma

A Dubai-based executive with one of the international developers active in the region says: “It has been a very busy year for us. If all of these plans come through in the next 12-24 months, it will be even busier.”

The executive is unsure whether all the planned gas-fired projects will materialise, however. “We have been here before, and some of these projects have experienced major delays in the past for reasons that are not even related to decarbonisation or net-zero targets.”

Given the GCC states' carbon emissions reduction targets and the recent easing of supply chain constraints, solar and wind IPPs appear to offer greater certainty for utility developers, many of which are also beholden to internal decarbonisation targets that include a reduction of their existing thermal fleets.

The contracts for five solar and three wind IPPs in the region are expected to be awarded soon.

Masdar has outpriced Acwa Power for the 1,800MW sixth phase of Dubai’s Mohammed bin Rashid al-Maktoum Solar Park project. A team of EDF and Kowepo has also submitted the lowest bid for the 1,500MW Al-Ajban solar PV IPP in Abu Dhabi.

In addition, SPPC has shortlisted bidders for two solar PV IPPs with a total combined capacity of 1,500MW under the NREP fourth round. It also expects to receive bids soon for three wind IPPs with a total combined capacity of 1,800MW.

Tenders for the NREP’s fifth round and Abu Dhabi’s fourth utility-scale solar PV farm are also expected imminently.

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Jennifer Aguinaldo

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    Across the Maghreb, amid a range of external and internal pressures, the pursuit of political stability is emerging as the overarching preoccupation for governments as they compete for trade, growth and investor interest.

    Wracked by drought, years of disruption due to Covid-19 and the impact of the war in Ukraine on grain prices, and now facing the boot of arbitrary US tariffs, the economies of the region need certainty more than anything.

    With fast-growing populations, all of the Maghreb countries face serious challenges in maintaining sufficient job creation to cater to their youth, and with local spending constraints, attracting foreign investment is key.

    None of the Maghreb countries seem to understand this better than Morocco, which has been rolling out what might be described as a GCC-style vision for the country. Most recently, in September 2024, it launched the Digital Morocco 2030 strategy to use artificial intelligence to improve access to services in rural and underserved areas.

    Such initiatives are central to Morocco’s broader New Development Model (NDM) strategy, first laid out in 2021 and recognised by bodies such as the Washington-based IMF as a key driver of economic transformation in the country. Key indicators for the NDM include doubling the country’s GDP per capita to $16,000 by 2035, doubling the rate of women in the workforce, raising renewables to 40% of total energy consumption and developing the digital sector to account for 5% of GDP.

    Rabat is also widening the country’s social security net, having expanded family allowances in 2023, and with plans to expand old-age pensions and unemployment benefits in 2025. The government is also improving access to services for Amazigh speakers in answer to loud political calls since the 2016-17 Amazigh-led Hirak Rif movement protests.

    From creating jobs to supporting vulnerable groups and minorities, the common thread in Rabat’s domestic policy is expediting measures to address emerging risks to social and political stability at source.

    Externally, Morocco has meanwhile intensified its diplomatic campaign for international recognition of its semi-autonomy plan for Western Sahara. First proposed in 2007, the scheme initially received little traction, but the situation changed significantly in 2020 with then US President Donald Trump’s recognition of Moroccan sovereignty over the territory as part of a deal to normalise ties with Israel. In 2022, Spain also shifted its stance to one of support for Rabat’s autonomy plan, followed by France in early 2024 and by the UK in June 2025 – each country for their own reasons.

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    Across the border in Algeria, the wheels of legislative change have also been slowly turning, with new hydrocarbons and investment laws, accompanied by the lifting of some restrictions on foreign ownership, raising the possibility of boosting inbound FDI.

    The government is also emphasising private sector-led growth and the rationalising of public spending, as well as initiatives to improve the business environment by reforming public banks and state-owned enterprises.

    President Abdelmadjid Tebboune secured his re-election for a second term in September 2024 with the support of 84.3% of the vote, in a reassuring referendum on the political stability of the country’s post-Bouteflika political order.

    Although the country’s politics remain marred by the suppression of the opposition, the broader shake-up in government is reflected in the ongoing reforms and demonstrates the country’s political awareness of the need to deliver.

    In a mirror image of Morocco’s diplomatic journey, Algiers has worsening foreign relations with Paris and Madrid due to its staunch opposition to the Western recognition of Moroccan claims to the Western Sahara region.

    In May 2025, Algeria expelled 15 French diplomatic agents, citing their “irregular positions” on the geopolitical issue. The incident matched similarly negative responses by Algeria to Spain in 2022.

    Trouble in Tripoli

    Libya remains deeply mired in the political deadlock between its two administrations – even as the years of rivalry between the administration has made it clear to all involved of the need for reunification for the stability of the country.

    Talks to establish a unified interim government and hold national elections have stalled over the past year, however, with armed clashes between rival militias in Tripoli in May 2025 only reaffirming the precarious state of affairs in the country.

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    In May, the committee then outlined some potential solutions, but political consensus remains elusive, leaving little near-term hope for a resolution to the situation in the country.

    Turbulence in Tunisia

    Tunisia, meanwhile, faces issues stemming largely from political instability inflicted upon it under President Kais Saied, who has ruled by decree since dissolving the country’s parliament in 2021. In March 2025, Saied dismissed his third prime minister in less than two years and appointed Sara Zaafarani in their place.

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    Abu Dhabi petrochemicals producer Borouge has extended the deadline for contractors to submit bids for a project to increase production of butene-1 from the olefins conversion unit (OCU) at its Borouge 2 plant.

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    Borouge Group International

    Borouge is the petrochemicals-producing joint venture of Abu Dhabi National Oil Company (Adnoc) and Austrian energy company Borealis. Adnoc owns the majority 56% stake in Borouge, with Borealis holding a 34% stake. The remaining 10% of shares in Borouge trade on the Abu Dhabi Securities Exchange following an initial public offering in June 2022, from which Adnoc Group earned proceeds of $2bn.

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    MEED understands that the contract is being finalised and is expected to be signed within the next few weeks.

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  • Hilton signs hotel agreement in Medina

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    Arada is the developer behind three masterplanned residential communities in Sharjah. The Aljada, Masaar and Nasma Residences communities are together valued at AED33bn. In Dubai, Arada is developing the Jouri Hills project.

    Covering 24 million square feet in the Muwaileh district, the masterplan for Aljada includes residential districts, as well as retail, hospitality, entertainment, sporting, educational and healthcare components, and a business park.

    The UAE’s heightened real estate activity is in line with UK data analyst GlobalData’s forecast that the construction industry in the country will register annual growth of 3.9% in 2025-27, supported by investments in infrastructure, renewable energy, oil and gas, housing, industrial and tourism projects. 

    The residential construction sector is expected to record an annual average growth rate of 2.7% in 2025-28, supported by private investments in the residential housing sector, along with government initiatives to meet rising housing demand.

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