Acwa Power plans sukuk issuance to shore up project financing: Tadawul-listed renewables player Acwa Power pulled the trigger on a sukuk issuance to raise up to SAR 1.8 bn (USD 479 mn), according to a disclosure to the Saudi bourse yesterday. This is the company’s second issuance — part of a wider SAR 5 bn sukuk issuance program — after a maiden SAR 2.8 bn sukuk sale in June 2021.

The details: The sharia-compliant debt instruments will be issued through private placement to institutional and qualified investors. The sukuk carry a seven-year tenor with a call option after five years subject to market conditions, the disclosure notes.

Where’s the money going? The disclosure doesn’t state which projects the sukuk are intended to finance, nor does it specify the sukuk are green. However, a bulk of Acwa Power’s projects involve renewable power and water desalination assets, so it’s reasonable to assume that funds raised through the sukuk issuance will be channeled in these areas.

Advisers: HSBC Saudi Arabia and SNB Capital are acting as joint lead managers and bookrunners on the issuance, according to the disclosure.

Acwa is expanding rapidly: Acwa Power has expanded its portfolio to 58 GW from 1 GW in under a decade, according to a recent Financial Times report. CEO Paddy Padmanathan previously told Bloomberg Asharq that the company is planning to invest as much as USD 12 bn in 2023, the outlet noted yesterday.

There’s a pipeline at home… : Among Acwa Power’s Saudi-based projects is a recently inked agreement with China’s Sungrow to build a 536 MW battery storage system in Neom. It’s formeda joint venture with Neom and US-based Air Products to develop Neom’s USD 5 bn Green Hydrogen Project. Another JV between Acwa Power and PIF subsidiary Badeel signed a power purchase agreement for a 2.06 GW solar plant in December.

… And overseas: The company signed a non-binding MoU with the Bangladesh Power Development Board (BPDB) in November to develop a 1 GW solar project in Bangladesh, following recent heavy investment in southeast Asian expansion with projects in Indonesia and Thailand. It’s also eyeing a 10 GW wind project in Egypt and renewables investment in Morocco and signed power purchase and investment agreements with the National Electric Grid of Uzbekistan for a 1.5 GW, USD 2.4 bn wind energy farm. The company is also developing a 240 MW wind farm in Azerbaijan with a reported investment of USD 300 mn.

The regional green + sustainable bond market is hot: GCC green and sustainable bond and sukuk issuances saw massive growth in volume and value last year, with some USD 8.5 bn raised from 15 issuances — a sizable increase from the USD 605 mn raised from six issuances in 2021.

MEANWHILE- The Dubai branch of the Industrial and Commercial Bank of China is planning to issue a three-year green bond, Reuters reports, citing a document it has seen. The bond issuance is expected to be worth at least USD 500 mn and could go to market as early as today, the outlet adds.

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