Two investment funds owned by the Saudi government have bought a stake totaling almost 20 per cent in local utility company Acwa Power.

Sanabil Direct Investment Company, owned by the Saudi Arabian Investment Company, and the Public Pension Agency (PPA) have acquired a 13.72 and 5.71 per cent stake respectively.

“This will have a significant positive impact on the strength of the company’s financial position and on its business by accelerating the execution of its strategic and expansion plans,” said Mohammad Abunayyan, chairman of Acwa.

Acwa won it first power project in Saudi Arabia in 2004, and has since developed a portfolio of 19 assets in 8 different countries, with a total investment of $17bn.

The company is planning an initial public offering on the Saudi Stock Exchange (Tadawul) in 2014.