ACWA plans biggest IPO since Aramco

ACWA Power International, one of Saudi Arabia’s main vehicles for building renewable energy projects, is set to raise up to 4.55 billion riyals (Dh4.4b) in what would be the biggest offering in Riyadh since Saudi Aramco’s listing.

The Riyadh-based utility, half-owned by the kingdom’s sovereign wealth fund, has set the price range for its offering between 51 riyals and 56 riyals per share, according to a statement yesterday. The company is selling 81.2 million shares, or an 11.1 per cent stake, to raise financing for its transformation into a low-carbon energy producer.

The listing will value ACWA at up to $11 billion.

The Saudi government sold 2 per cent of Aramco in its 2019 IPO, raising almost $30 billion (Dh110b). It’s still the largest first-time share sale on record.

ACWA Power “aims to play a major role” in the transition to greener energy by producing renewable electricity and hydrogen, it said in a prospectus for investors. It will also focus on desalination in the Middle East, Asia and Africa.

Crown Prince’s vision

Since the Saudi wealth fund boosted its stake in ACWA to 50 per cent in November, the government has agreed with the company that it will help develop 70 per cent of renewable energy projects under Crown Prince Mohammad bin Salman’s Vision 2030 plan to diversify the economy from oil.

The offering comes as Aramco and other national oil firms in the Middle East step up plans to raise billions of dollars from foreign investors, including through asset sales and IPOs.

Riyadh has been the hottest market for share offerings in the Middle East over the past two years, with new sales oversubscribed mostly thanks to local retail and institutional investors.