Acwa Power shows local developers can succeed

23 October 2014

Saudi firm’s rise demonstrates local companies can play major part in utility sector

The rise of Saudi Arabia’s Acwa Power to second in the MEED developer rankings is evidence of the developer’s continued growth in the GCC’s power sector.

Already having been second in total equity capacity in the GCC’s desalination sector, Acwa Power’s displacement of Japan’s Marubeni to second place in the ranking conveys the remarkable rise of the developer, which was founded in 2004.

While the merger of the UK’s International Power and France’s GDF Suez in 2011 has made its position unassailable at the top of the rankings, Acwa Power’s growth above a host of large international power firms shows there is room for local companies to succeed in the region’s private power sector.

The developer’s position in its local market is clear. Having won all but one of the last eight tendered private utility projects in Saudi Arabia, Acwa Power’s domestic position was further strengthened in early 2013, when the government acquired a 20 per cent stake in the developer – a move that was questioned by international developers seeking to penetrate the kingdom’s lucrative utilities market.

The government investment will also have significantly increased the value of Acwa Power, ahead of its proposed initial public offering (IPO). With a strong domestic position established, the firm is now turning its attention to regional expansion. Having already picked up work in Oman and having acquired shares in its first UAE utility in 2014, the developer will be seeking to build on this in the coming years.

Regardless of how successful it is in its ambitious expansion goals, Acwa Power’s rapid growth shows that local companies can compete and thrive in the region’s utility sector.

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