Saudi ACWA Power to borrow $8 bln to boost capacity, says CEO

Saudi Arabia-based ACWA Power is planning to borrow $8 billion in H1-2016 to finance projects amid government plans to cut spending due to cheap oil prices, Reuters reported, citing chief executive officer Paddy Padmanathan.

The power and water project developer aims to raise its generating capacity by one third by the end of 2016 to meet pent-up demand for electricity driven by a growing population.

The loan will be used to finance ACWA's 1,200 megawatt (MW) Hassyan clean coal power plant in Dubai. Alstom and ACWA, a consortium between China's Harbin Electric, was picked to build the $1.8 billion plant.

ACWA will also refinance debts against the Rabigh 1 power plant and develop Oman's largest private power project Ibri/Sohar-3 with a total capacity of 3,200MW, as well as the 100 MW Redstone solar plant in South Africa.

The new investments are expected to increase ACWA's power assets by the end of this year to 28,000 MW from current 21,000 MW.

Meanwhile, ACWA is competing with several local and international bidders for Saudi Arabia's Fadhili IPP project.

"They haven't formally announced anything yet, but the market is telling us that it is between us and GDF Suez GSZ.PA," Padmanathan added.

ACWA is aiming to win new awards in Jordan, Morocco, and the United Arab Emirates (UAE) and has offered to build a 2,250 MW independent power project (IPP) at Dairut.

The company is seeking more overseas operations to offset subdued activity in the local market, Padmanathan said, hoping conditions will improve this year.