The deal was signed on Thursday between Paddy Padmanathan, ACWA Power’s president and chief executive officer (CEO ) and Gulrez Hoda, IFC director for Infrastructure and Natural Resources in Europe, Central Asia, Middle East and North Africa.
According to the agreement, the signatories will be investing in Jordan’s largest electricity producer to improve power delivery in the country and boost investor confidence in Jordan’s energy sector.
Under the agreement, the IFC will be investing around $10.5 million to support ACWA Power’s acquisition of Enara Energy Investments PSC, which in turn owns 51 percent of Jordan’s Central Electricity Generating Company (CEGCO).
IFC’s investment will support ACWA Power’s plans to improve the efficiency of CEGCO’s power plants through their re-powering, up-rating and rehabilitation and to expand CEGCO’s generating capacity to keep pace with the country’s rapidly growing electricity needs.
“This partnership with IFC is yet another significant landmark in the annals of ACWA Power, as we continue to expand our operations in the GCC region, Jordan, Turkey, Egypt, Morocco and South Africa,” said Padmanathan. “Our focus will be to deliver power in the most sustainable manner at the lowest possible cost during the implementation of the program.”
As part of its investment, ACWA Power, a Saudi power and water desalination firm, has agreed with the 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 seven power plants in Jordan.
“Supporting regional investors like ACWA Power is a priority for us since our organization understands that infrastructure in the Middle East and North Africa will require significant investments in the coming years to make possible the kind of economic expansion the region needs for its growing population,” said Hoda.
ACWA Power and IFC will acquire equity shares in Enara, a holding company created by CEGCO’s current owner Jordan Dubai Capital, which bought CEGCO in 2007.
CEGCO is the largest power generator in Jordan with seven power plants nationwide.
Together, these facilities have about 1,550 megawatts of installed capacity, 59 percent of the country’s total requirement.
This partnership marks the beginning of a long-term relationship between IFC and ACWA Power, which are looking to collaborate on power delivery and water desalinization projects.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries.
In a time of global economic uncertainty, IFC’s new investments reached a record high of $18 billion in fiscal year 2010
ACWA Power is a developer, owner and operator of power generation and desalinated water production plants structured on a concession or utility outsourcing contract model co-funded within a limited recourse, project finance framework.
The company, incorporated in the Kingdom,is a privately owned Joint Stock enterprise with a paid up capital of SR 3.71 billion.
At present , it has five mega projects including Rabigh IWSPP, Shuaibah IWPP, Shuaibah Expansion IWP, Marafiq Jubail IWPP and Shuqaiq IWPP.
In addition , it has constructed two barge-mounted, self-supporting desalination plants.