APICORP and ACWA Power have signed a five-year Shariah-compliant corporate facility, worth US$125mn, to support ACWA Power?s future growth pipeline
The agreement is aligned with APICORP and ACWA Power?s shared mission of accelerating the energy transition in the MENA region and all over the world, through green technologies, which comprise more than 15% of APICORP?s financing portfolio.
The five-year tenor is well suited for financing a renewable project?s initial life cycle. Moreover, the APICORP facility can also be used as a revolver loan during the initial three-year period, whereby, it could be settled or redrawn as per ACWA Power?s liquidity needs, enabling the company to recycle capital and increase financial capacity for further growth.
Nicolas Th?venot, managing director of corporate banking at APICORP, said, ?Backing the sustainable development of the Arab energy sector through innovative financing solutions continues to be a strategic priority for APICORP. Worldwide and across the MENA region, we are witnessing a concerted drive to accelerate the share of renewables in the energy mix through the adoption of innovative, low-carbon technologies and solutions. This agreement further cements our longstanding and fruitful partnership with ACWA Power to build a renewable, more sustainable energy future.?
Rajit Nanda, chief portfolio management officer and acting chief investment officer of ACWA Power, said, ?Pursuing renewable energy development is the cornerstone of ACWA Power?s growth strategy, and we are focused on enabling transformative solutions to help reduce carbon footprint and increase the share of renewable energy in the Kingdom of Saudi Arabia, and globally. The timely closing of this facility has also further strengthened ACWA Power?s relationship with APICORP, a long-term financial partner.?
Kashif Rana, chief financial officer, added, ?APICORP?s US$125mn facility will serve as an important funding source to support the agile and robust expansion of ACWA Power?s ?green? portfolio across markets. The revolving feature of this facility offers ACWA Power the flexibility to reallocate and thus optimise its utilisation. We look forward to continuing our collaboration with APICORP as we actively seek to unlock renewable energy potential and deliver long-term, sustainable value to nations, backed by our strong ESG framework.?
APICORP provided a US$70.5mn commitment to support ACWA Power and other co-sponsors to develop Phase V of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai last year.
APICORP forecasts that renewables will comprise under one-third (32%) of the total value of the planned and committed power projects in the MENA region, for the period between 2020- 2024.
