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BRI Fund Secures 49% Stake in Middle East Renewable Energy Platform

Beijing-based Silk Road Fund confirms go-ahead of joint venture with Saudi Arabia's Acwa Power green utilities group.

Photo: The Silk Road Fund and Acwa: Jointly seeking success in the Middle East’s solar-power sector.
The Silk Road Fund and Acwa: Jointly seeking success in the Middle East's solar-power sector.
Photo: The Silk Road Fund and Acwa: Jointly seeking success in the Middle East’s solar-power sector.
The Silk Road Fund and Acwa: Jointly seeking success in the Middle East's solar-power sector.

China's Silk Road Fund (SRF) has announced plans to acquire a 49% stake in Acwa Power Renewable Energy Holding (APRE), the renewable-energy platform developed by Acwa Power, the Riyadh-headquartered utilities business. The move follows the earlier signing of a memorandum of understanding between the two parties, which again related to the joint development of such a platform.

Administered from Beijing, the Silk Road Fund is a state-owned investment vehicle established to help deliver on the objectives of the Belt and Road Initiative (BRI), China's ambitious overseas infrastructure development and trade facilitation programme. Acwa Power, meanwhile, is a leading Saudi developer, owner and operator of power generation and water desalination plants, with the APRE its platform for developing renewable-energy development projects in a number of emerging markets. In particular, it has initiated several solar and wind power projects in the United Arab Emirates, South Africa, Jordan, Egypt and Morocco. In total, its developments to date are said to have an approximate aggregate generating capacity of 1,668MW.

Welcoming the deal with the SRF, Rajit Nanda, Chief Investment Officer of Acwa Power, said: "As one of the leading developers of power and water assets in the region – and as a business based in a key BRI partner country – we are delighted to have the SRF on board. This new relationship cements our role as supporting both the economic transformation envisioned by the BRI and that of Saudi Arabia's own forward-looking Vision 2030."

Greeting the move in a similarly effusive fashion, a spokesperson for the SRF said: "This new arrangement will play a key role in deepening cooperation between Saudi Arabia and China with regard to the infrastructure and new energy priorities of the BRI, while also facilitating the joint development of the Green Silk Road."

As a result of the deal, the SRF now has a stake in a number of the Middle East's key renewable energy projects. In Jordan, for instance, the APRE has two PV solar facilities – in Mafraq and Risha – while it is also midway through building three solar facilities at the Benban solar complex, as well as the 200MW Kon Ombo project in Egypt. The Benban project alone is valued at some US$214 million and has been 75% funded by the European Bank for Reconstruction and Development and the Industrial and Commercial Bank of China.

In addition, in February this year, APRE won the tender to build Bahrain's first large-scale PV solar plant, which is to be developed on the Askar landfill site. It has also signed a deal to develop the $400 million Ibri solar project on behalf of the Sultanate of Oman. In November, it also secured the required funding for its Sakaka solar PV project in Saudi Arabia.

Reassuringly, the SRF and Acwa have a long history of successful cooperation. Earlier this year, for one, they co-financed Dubai's 950MW CSP Mohammed bin Rashid Al Maktoum Solar Park project. By 2030, this massive undertaking is expected to produce 5,000 megawatts of power, following a total investment of AED50 billion.

Geoff de Freitas, Special Correspondent, Riyadh

Content provided by Picture: HKTDC Research
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