ACWA Power still keen on buying SEC assets
Saudi Arabia plans to split up the state-controlled utility into separate companies that would be offered either to local citizens through offers on the stock market, or to local or international corporate partners
Riyadh-based ACWA Power said it expects the first of four power generation companies owned by Saudi Electricity Co (SEC) will be offered to the market by the year-end, as the kingdom presses ahead with its overhaul of the state sector.
The world's largest oil exporter plans to split up the state-controlled utility into separate companies that would be offered either to local citizens through offers on the stock market, or to local or international corporate partners.
Chief Executive Paddy Padmanathan told Reuters that privately-held ACWA Power is still keen to buy assets from SEC after the kingdom completes the restructuring the firm.
"We know that consultants have been appointed and we are very confident that the first bundle will come out, at least the request for qualification, before the end of this year," Padmanathan said in an interview in Dubai on Tuesday.
Preparations to sell the plants are complex due to their different fuel mixes, locations, staffing, and loan agreements and export financing arrangements.
The revamp was put under review last year, sources told Reuters, which could result in the original plan being retained or a new restructuring scheme put in place.
"The more clarity they give to the private sector about the bundles, the better responses they are going to get, the more realistic it is going to be valued."
The plan is part of wider reforms to the Saudi energy sector in which private companies would have to play a key role in generating electricity.
"We will be buying. This is our domestic market and we are well positioned," Padmanathan said. "The biggest growth for us is going to be Saudi Arabia because of all the privatisation."
The government implemented new energy prices last year as it reviewed subsidies to cut domestic consumption and reduce waste.
"At the moment, 60 percent to 70 percent of electricity consumption is being used to support air conditioning in Saudi Arabia."
The Saudi Energy Ministry launched last month the first tenders to generate power from renewables as it diversifies its energy mix by cutting the use of oil in power and water plants.
ACWA will be participating in the tenders, which include 300 MW of solar plant and 400 MW of wind. Padmanathan said he expects to submit a proposal in the next few weeks.
ACWA describes itself as an investor, developer, co-owner and operator of a portfolio of plants in Europe, Asia and Africa that generate 18 gigawatts of power and produce 2.5 million cubic metres of desalinated water a day.