Powering the Universe
ACWA Power has grown into a leading private sector energy and water provider, achieving significant milestones over the years since it was founded. Much of this success can be attributed to its President and CEO, Paddy Padmanathan, who has studiously served the company for nearly two decades
Paddy Padmanathan is the President and CEO of ACWA Power. He has been chosen as the utilities industry personality of the month for his achievement at ACWA Power over the past few years.
Early this year, ACWA power set the pace for the first ever concentrated solar plant (CSP) in Dubai following a ground-breaking ceremony for the $3.8bn project at the Mohammed Bin Rashid Al Maktoum solar plant.
HH Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President, prime minister and ruler of Dubai broke the ground on the project which will be the world’s largest CSP plant on the independent power producer (IPP) model.
The project also to set a new benchmark of a levelised cost of electricity (LCOE)of US $7.30 cents per kilowatt hour; a cost level that competes with fossil fuel generated electricity without subsidy for reliable and dispatchable solar energy through the night.
Padmanathan has served ACWA Power from 2005 as the company grew from a startup to where it is today; a leading private developer, owner and operator of power generation and desalinated water production plants headquartered in Saudi Arabia.
Under his leadership, ACWA Power has grown into a leading private sector energy and water provider, achieving significant milestones over the years.
Established in 2004, coinciding with the launch of Saudi Arabia’s privatisation programme for power and water sectors, ACWA Power International has demonstrated a consistent track record and a winning streak, capturing a number of major power and water desalination projects within Saudi Arabia and abroad.
Starting from Shuaibah IWPP on the western coast of Saudi Arabia in 2005, the company is now an internationally recognised developer, investor, co-owner and operator of power and water plants. It has a total generation portfolio of 15381 MW of power and 2.5 million m3/day of desalinated water with an investment outlay in excess of $30bn.
ACWA Power provides employment to more than 2,300 people in Saudi Arabia and parts of GCC, Jordan, Morocco, Turkey, Bulgaria, Czech Republic and Southern Cone of Africa, and continues to expand in other target markets, including Egypt, Vietnam, Indonesia and Philippines.
Since 2006, ACWA Power has achieved a striking annual growth rate of 43 per cent for its contracted power capacity to be delivered to its customers, while for desalinated water, the growth rate has been 13% CAGR, mainly in Saudi Arabia and Oman.
The company’s vision is to facilitate innovation and entrepreneurship in the private sector, and that it makes electricity and desalinated water available in a reliable manner to support social development and economic growth.
Ultimately, the mission is to reliably deliver electricity and desalinated water at the lowest possible cost to its target countries. ACWA Power’s medium term plan is to more than double its desalinated water capacity up to 5 million m3/day while for power the target is to reach up to 39,000MW by 2017-18.
“By relentlessly focusing on its mission, the company has consistently delivered tenders for long term contracts, which are typically lower by a double-digit margin in percentage terms and hence better value than the next competitor”, says Paddy Padmanathan, CEO of ACWA Power.
“There are multiple partners who contribute to the cost of the electricity and desalinated water we produce; the only way we can fulfil our mission is by convincing the whole of the supply chain to not simply market price their respective inputs but to offer the best fit-for-purpose solutions.”
“By cultivating a mutually supportive trust based partnership with each and every partner we require on each project, spanning from technology providers, engineering, procurement and construction contractors, equity investors who co-invest with us, debt finance providers, insurance service providers and a vast array of consultants and advisors, ACWA Power is consistently delivering on this challenging mission.”
It is no surprise that ACWA Power has delivered some of the top projects in the region and this has been recognised by the industry. Such projects include: the world’s largest power and desalination plant, Marafiq IWPP, Saudi Arabia, the world’s largest combined cycle gas fired power plant, Qurayyah IPP, Saudi Arabia, the world’s largest barge-mounted desalinated water plant Bowarege, Saudi Arabia, the world’s largest concentrated solar power plant Ouarzazate CSP IPP, Morocco, and the world’s largest thermal storage CSP plant, Bokpoort CSP IPP, South Africa.
ACWA Power’s footprint can be seen across a multitude of energy technology and market environments. The majority of its assets are based on long-term off-take contracts, but the company is cautiously expanding into merchant markets across the world and demonstrating its capacity to compete in energy markets of the future.
It continues to expand into renewables, particularly solar, and aims to increase its renewables portfolio up to 10 per cent of its total generating assets by 2018.
In terms of meeting its growth requirements, the company is following a meticulous plan aimed at increasing its capital base by successfully inducting strategic and certain public sector long term institutional investors.
As well as the International Finance Corporation recently joining the shareholders group, plans are afoot to offer a part of the shareholding to the general public via IPO in the course of 2015.
In terms of its corporate governance framework, ACWA Power aims to be a role model in MENA’s utilities sector. ACWA Power’s code of corporate governance, first adopted in 2009, is modelled around best practices rather than the minimum compliance philosophy.
“At ACWA, it is the demonstration of the benefits of an approach based on legitimate enthusiasm as opposed to mechanical compliance to a code of corporate governance and a set of best practices that has helped us proactively engaging with the stakeholders not only to institutionalise overall governance but also inculcating behaviours necessary for the success of ACWA Power as an industry leader”, says Mr Padmanathan.
One of the success stories at ACWA Power is its corporate social responsibility strategy. At ACWA Power, CSR is not intended to simply as a strategy to enhance the brand, but is integral to achieving its business objectives. “For us at ACWA Power, CSR, governance and ethics are not just a set of risk management tools, which require doing just enough to possibly avoid censure. Given how central CSR is to our business performance, we seek to work in partnership with our stakeholders network to integrate opportunities for action into our business strategies and objectives”, says Mr Padmanathan.
ACWA Power achieves its CSR objectives through a number of measures that ensure local jobs are created, growth is generated, and living standards among local communities are enhanced.
A graduate of University of Manchester, UK, Mr. Padmanathan started his career as a consulting engineer delivering infrastructure projects financed by the national treasuries and multilateral financial agencies and moved on to develop privately financed power, water and wastewater projects in over a dozen countries.
A substantial period of his career before ACWA Power was with Black & Veatch, a US headquartered multinational engineer & constructor where he served as a Vice President and Corporate officer.
Mr. Padmanathan also serves on the board of directors of several companies all operating in the water and power sectors.