Saudi Arabian developer ACWA Power has signed a US$125 million facility that will serve as a funding source to support the growth of its green energy portfolio.
The five-year deal with Arab Petroleum Investments Corporation (APICORP), a Saudi-headquartered development bank, has been earmarked for funding ACWA’s investments in projects in the countries the firm currently operates in as well as future high-growth markets.
According to ACWA, the five-year tenor is well-suited for financing a typical renewable project’s initial life cycle, enabling greater financial strength during the early development phase. The facility can also be used as a revolver loan during the initial three-year period, whereby it could be redrawn for ACWA liquidity needs.
Kashif Rana, CFO at ACWA Power, said the facility will be an important funding source to support the “agile and robust expansion” of the company’s green portfolio. “The revolving feature of this facility offers ACWA Power the flexibility to reallocate and thus optimise its utilisation. We look forward to continuing our collaboration with APICORP as we actively seek to unlock renewable energy potential and deliver long-term, sustainable value to nations.”
The agreement comes months after APICORP provided a US$70.5 million commitment to support ACWA Power and other co-sponsors to develop the fifth phase of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai, which is described as the world’s largest single-site solar project.
“Backing the sustainable development of the Arab energy sector through innovative financing solutions continues to be a strategic priority for APICORP,” said Nicolas Thévenot, managing director of corporate banking at APICORP.
Including assets that are under construction or in advanced development, around three-quarters of the total capacity of ACWA’s portfolio is dedicated to low carbon technologies. Saudi Arabia-based Public Investment Fund recently increased its shareholding in the company from 33% to 50%.