ACWA Power restructures debt, ownership in Turkish affiliate

Saudi utility giant ACWA Power has restructured debt and ownership in its Turkish affiliate, converting outstanding loans into equity following an agreement with major lenders and minority shareholders.

ACWA Guc, which operates the 950-megawatt combined cycle gas turbine power plant in Kirikkale, Turkiye, is partially and indirectly owned by ACWA Power.

The deal involves lenders converting their loans into shares of ACWA Guc based on specific shareholding agreements and conversion terms, according to a statement on the Saudi Stock Exchange, or Tadawul.

To facilitate the transition, a wholly owned ACWA Power subsidiary will pay SR496.5 million ($132.2 million) to the lenders in installments over three years.

Following this, ACWA Power, its subsidiaries, current minority shareholders, and relevant stakeholders have entered into a series of contractual agreements.

Post-deal, ACWA Guc is expected to be free of any commercial debt to third parties and will remain classified as an equity investment for ACWA Power.

The $1 billion plant in Turkiye was launched in November 2017 during a ceremony attended by President Recep Tayyip Erdogan and Berat Albayrak, the minister of energy and natural resources, among other senior officials.

The combined cycle power plant has a capacity of 1,000 MW and is capable of meeting 3 percent of Turkiye’s total electricity demand. It is the first and largest Saudi energy investment in Turkiye’s power sector.

The Kirikkale Power Plant provides steady and reliable energy to Turkiye’s national grid and is among the top three most efficient combined cycle gas power plants in the country, significantly contributing to the economy through gas consumption savings.

In a continued drive to streamline its operations and expand its market reach, ACWA Power also finalized deals in July to sell a 35 percent stake in two subsidiaries to China Southern Power Grid International for SR595.9 million.

In a statement to Tadawul, the Public Investment Fund-backed company announced the completion of the sale and purchase agreement for its shares in ACWA Power Bash Wind Project Holding Co. and ACWA Power Uzbekistan Wind Project Holding Co.

The restructuring and recent transactions underscore ACWA Power’s ongoing strategic efforts to optimize its portfolio and enhance its global presence in the energy sector.