Saudi's Acwa buys key stake in Jordan firm
Riyadh, August 22, 2011
Acwa Power International, a leading water desalination and power generation company in Saudi, said it has acquired a 65 per cent controlling stake in Jordan-based Enara Energy Investments.
In addition to this, Acwa Power also announced the completion of the sale of a minority stake in Enara to International Finance Corp (IFC), a member of the World Bank Group.
Enara possesses a 51 per cent stake in Central Electricity Generating Company (Cegco), Jordan's largest electricity producer.
The largest power generator in Jordan, Cegco boasts of seven power generation complexes nationwide, totaling Circa 1,550MW of installed power capacity of a mixed portfolio of technology and fuel types that meets around 59 per cent of the country’s current electricity consumption.
The deal will help Acwa Power establish a major presence in Jordan and contribute to increasing Jordan’s electricity generation capacity to keep pace with its rapidly growing demand, while being mindful of utilizing the scarce fuel resources in the most efficient manner possible, the Saudi company said in a statement.
Early this year, Acwa Power entered into a binding agreement with Jordan Dubai Capital to acquire a controlling stake in Cegco.
Later, in July this year, Acwa Power had also announced the signing of a binding agreement with IFC for selling a minority stake in Enara.
IFC invested $10.5 million for the minority stake in Enara. Both the above transactions value 51 per cent of Cegco shareholding at $144 million.
In line with this vision, Acwa Power also submitted a bid for the 650 MW greenfield power project East of Amman (IPP3) and also supported Cegco (as a majority shareholder) in submitting its bid for a peaking power project of 250 MW at one of its existing plant locations.
Acwa Power said it will also be focusing on supporting Cegco to repower or refurbish its existing power plants which are close to decommissioning and increase the availability and quality of electricity supply in Jordan.
All of the above initiatives reaffirm Acwa Power’s support and confidence in the energy sector of Jordan, it added.
Acwa Power currently owns a 65 per cent controlling stake in Enara, while Malakoff, the Malaysian electricity company, and Athens-based Consolidated Contractors Company, will continue to own respective stakes of 25 per cent and 10 per cent in Enara.
Cegco is 40 per cent owned by the Jordanian government, while the rest of the stakes are held by the Social Security Corporation of Jordan (9 per cent) and Enara owns the remaining 51 per cent.
Commenting on the acquisition, Mohammed Abunayyan, chairman of Acwa Power, said, “Jordan is a stable country politically, economically and socially, and we will work on improving power delivery in the country.'
Acwa Power, he said, had agreed with IFC to implement an environmental and social action plan which will result in improved operational safety and create an environmentally sustainable platform at Cegco's 7 power plants in the country.
Francis Gomez, newly appointed head of Acwa Power’s operations in Jordan and the CEO of Enara said, 'Acwa Power plans to invest significant additional capital to enhance the performance of the power plant complexes; by improving operational efficiency, upgrading capacity, and replacing and renewing plant units as required.'
'These initiatives are expected to increase the amount of energy that Cegco generates to ensure that it can respond to the increased electricity needs of the country,' he added.-TradeArabia News Service