CEO’s message

Mohammad A Abunayyan
In our ambitious drive for growth and scale over the past two decades, we have found special opportunities for energy transition and successfully captured them with imagination and vigour.”

Paddy Padmanathan President & CEO

Dear stakeholders,

2022 was our first full year as a publicly listed company and we have demonstrated to our wider investor base our commitment and ability to deliver sustainable stakeholder returns using our Develop, Invest, Operate and Optimise business model.

Energy transition takes ingenuity and we have this quality in abundance right across ACWA Power. In our ambitious drive for growth and scale over the past two decades, we have found special opportunities for energy transition and successfully captured them with imagination and vigour. We have increased the efficiency of our operations by virtue of technical inventiveness and digital transformation across the organisation. And our innovative financing and capital structuring, combined with our operational prowess, have allowed us to optimise our portfolio both financially and operationally. 2022 has been no different in that sense.

We have grown our business and delivered robust financial results in a year still blighted by the residual upheavals of the Covid pandemic, the Russia-Ukraine war fuelling rampant inflation, restricted supply chains and now a rising interest rate environment. All key financial indicators posted solid growth over 2021. While the consolidated operating profitOperating income before impairment loss and other expenses for the year reached SAR 2,614 million, an increase of 14%, adjusted net profitAdjusted profit/(loss) attributable to equity holders of the parent of SAR 1,575 million grew by 32%. Consolidated net profit attributable to equity holders of the parent more than doubled to SAR 1,540 million and +103%, delivering SAR 2.11 earnings per share for the year.

As we have repeatedly stated, today’s new projects under construction and in advanced development in our portfolio are tomorrow’s visible, stable income and cash streams.

In 2022, we signed five power purchase agreements (PPA) and one water purchase agreement (WPA), which added a record 5,440 MW of power generation and 600,000 m3/day of water desalination capacity to our portfolio in Saudi Arabia, Egypt, and Uzbekistan, including the 2,060 MW Shuaibah 2 PV PPA from within the PIF pipeline; this takes the total capacity in financial close, under construction and in advanced development under the PIF scheme to 3,560 MW.

Within four months after signing the WPA, we achieved the financial close for the 600,000 m3/day Shuaibah 3 reverse osmosis (RO) project in Saudi Arabia. In the last month of the year, we achieved dry financial close for two 500 MW wind projects in Uzbekistan.

With these milestones successfully achieved, all these projects are now closer to their operational lives, which are expected between late 2024 and early 2027.

NEOM Green Hydrogen Project (NGHP)

NGHP is the largest at-scale green hydrogen under-construction project of its kind in the world with a total investment cost of USD 8.5 billion. This mega-plant will integrate 4 GW of solar and wind energy to produce up to 600 tonnes/day of carbon-free hydrogen from 2026, to then convert to liquid green-ammonia to transport and export to the world. The NEOM Green Hydrogen Company (NGHC), an equal partnership between ACWA Power, Air Products and NEOM, has successfully reached a critical milestone early this year by completing its financial close of USD 6.3 billion of non-recourse project finance debt. Back in December, NGHC had signed the financing documents with multiple banks and investment firms, which in turn had enabled NGHC to also conclude the EPC agreements and issue full notice to proceed with Air Products as the sole off-taker of the project.

Securing project financing of this magnitude for this very first at-scale green hydrogen project is very significant. It could not have happened without the commitment from the partners and the trust of the investment community in our endeavour to lead the world in its transition to a carbon-free future.

32% adjusted net profit
of SAR 1,575 million grew by 32%
5,440 MW
In 2022, we added a record 5,440 MW of power generation capacity to our portfolio, all in renewables

Financial optimisation

As you know, financial optimisation via refinancing or sell-downs is a critical element of our business model that provides us with an opportunity to improve our returns. 2022 has been a productive year in this regard, and we have been very active in our capital recycling activities in addition to raising new debt. To recap, the most significant transactions, leaving their financial implications to the accompanying MD&A and the notes to our audited financial statements, include the following.

  • We submitted to the Capital Market Authority (CMA) of Saudi Arabia our application to issue the second tranche of Sukuk under the SAR 5 billion programme, which subsequently raised SAR 1.8 billion in February 2023 at record pricing in double digits in the SAR market since 2017 with 2.24x oversubscription.
  • APMI One, our 100% owned subsidiary, launched a tender offer to partially purchase the ACWA39 bonds listed on the Irish Stock Exchange; this resulted in a cash claw-back at a pre-amortization aggregate principal amount of approximately SAR 1.5 billion, or 49.2% of the then outstanding pre-amortisation aggregate principal amount.
  • We fully prepaid the remaining outstanding balance of the Silk Road Fund’s convertible loan and some of our equity bridge loans.
  • We successfully completed the refinancing of our project companies of RAWEC, SWEC and Barka projects.
  • We entered into sale and purchase agreements with respect to Shuqaiq IWPP, Sirdarya CCGT IPP, Shuaa Energy 3, Vinh Hao PV IPP, and Redstone CSP IPP. Please refer to the MD&A and Note 33 to the accompanying financial statements for further details and the closing status of each of these transactions.

Safety, operations, digitalisation, and sustainability

Although safety is our core value and the cornerstone of our operations and we place the greatest emphasis on the safety of our people and plants towards creating a zero-harm culture, it is with profound sadness and very heavy heart that I once again commemorate here our three colleagues who lost their lives while working at Umm El Quwain IWP, Sirdarya and QIPP projects in 2022.

While reliability of supply — ultimately measured at plant level with the power and water made available for dispatch (“plant availability”) — is core to our operational performance, 2022 has been a disappointing year given the number and duration of unplanned plant outages in some of our plants. As a result of this, our consolidated power availability for the year at 87% was one of the lowest historically, mainly driven by two plants in Morocco and Saudi Arabia. Our desalinated water plants’ consolidated availability, however, at 97% for the same period, was in line with our historical, stellar track record.

Although it is a relief to report that these plants are back online, we recognise that there is further room for improvement to stay one step ahead of unplanned failures. That is why, in one of my earlier addresses, I explained that we had embarked on initiatives to establish stronger structural foundations in the mid to long-term horizon to improve reliability of supply of our plants. Led by our senior executive team and focusing on those plants that experience outage more often than average, the drive for reliability of supply comprises a number of areas and engages the original equipment manufacturers (OEM) as well as our own technical teams.

The digital transformation that we embarked upon during 2022 is a standalone initiative with a large scope across our organisation. It is increasing our operational efficiency, contributing to the reliability of supply of our plants and reducing risk by using machine learning and artificial intelligence for the advanced analytics of the vast amount of data we constantly collect particularly at plant level. In that sense, digital ingenuity is an important enabler of our continuous improvement in our way of working to become more efficient and effective in supplying reliable, affordable, and sustainable power, water, and green hydrogen.

In 15+ years we have become the largest power & water developer in the GCC region, and NOW LEADING THE energy transition GLOBALLY

I am also glad to report a remarkable scorecard for 2022 for our energy transition and decarbonisation activities. It was not only that all the new capacity we added was in the renewable energy space or that tens of billions of dollars’ worth of MOUs we signed with multiple governments were to explore the advancement of green hydrogen development in the respective countries. Our commitment to lead the energy transition has also been unmistakably demonstrated by our solid actions in another, relatively more difficult, sometimes more costly area, to find a cleaner solution to our already established fossil-fuel sourced assets.

The 2,400 MW Hassyan Clean Coal power plant in Dubai was designed to operate with coal as the primary fuel, and natural gas as the back-up fuel. In February 2022, we announced together with our off-taker, DEWA, the decision to convert this plant to operate with natural gas as the primary fuel. With this action, we have not only removed the last coal asset in our portfolio but also have paved the way for saving 30 million tonnes of carbon emissions by 2030.

In June 2022, ACWA Power and the offtaker of Shuaibah 3 IWPP, an oil-fired asset in Saudi Arabia with thermal water desalination and power generation capacity of 880,000 m3/day and 900 MW respectively, have agreed to amend and restructure the existing PWPA to replace it with a new WPA for a 600,000 m3/day reverse osmosis (RO) seawater desalination plant. The new RO plant, at an estimated total investment cost of around SAR 3 billion, will be developed under a concession period of 25 years, with commercial operations scheduled for Q2 2025. The RO plant will use 20% of its energy from renewable sources and, in addition to providing support to the Kingdom towards its Vision 2030, the conversion will reduce our Scope 1 carbon emissions by 9.5 million tonnes/year.


We said farewell to Julio Torre Gutierrez, Chief Operations and Maintenance Officer (COMO) and CEO of NOMAC; Yara Anabtawi, Chief of People, Culture and Communications Officer (CPCCO); Clive Turton, Chief Investment Officer (CIO); and Rajit Nanda, Chief Portfolio Management Officer (CPMO), all of whom left ACWA Power to either retire at the end of successful careers or to pursue other interests. We replaced all these positions except for the CIO position, which is currently being caretaken by Bart Boesman, our Chief Technology Officer (CTO). Both Julio’s and Rajit’s successors are from our internal bench; from within NOMAC, Stefan Verlee replaced Julio as our new COMO and CEO of NOMAC and, leaving his Chief Financial Officer (CFO) role, Kashif Rana replaced Rajit as our new CPMO and Abdulhameed Al Muhaidib, another ACWA Power veteran, became the CFO. Replacing Yara, we welcome Faisal Jadu as our new CPCCO, who joined ACWA Power family on 1 November 2022.

On 20 March 2023, with great sadness, yet with considerable pride and gratitude, I decided to retire from my executive role as President and CEO of ACWA Power, convinced that the Company will benefit from being invigorated with “new blood” after the first phase spanning 18 years of growing from a startup, to now a publicly listed large corporation. I, however, will continue to serve the Company as a non-executive member of the Board of Directors.

From the earliest days of the foundation of ACWA Power, I have had the honour and privilege of working alongside what today is a very large group of passionate, talented, and committed individuals. Together, we have created an enterprise that has turned out to be a much recognised and admired leader of the energy transition, now delivering in 12 countries on three continents providing energy and water, the two most vital inputs to not just fuel economic growth and social prosperity but to sustain life itself.

While I am incredibly humbled of all that we have collectively achieved to date, I also cannot wait to watch the Company grow, thrive and excel under the leadership of my successor, Marco Arcelli, a seasoned C-level executive with over 20 years of international experience in energy and infrastructure, and digital innovation. As an energy expert, Marco has held various leadership positions and played a crucial role in the strategic positioning and growth of multinational companies. His previous positions at Enel, one the largest energy utilities in the world, and more recently as Chairman of EP New Energy, are all a fantastic precursor to the role he will play in building ACWA Power to the next level.

As Marco takes the reins, I am convinced that ACWA Power will continue to innovate and thrive as we move forward and have every confidence in our senior leadership team and in each and every one of our 4,000+ people, to stay ahead of the ever-changing landscape of challenges we face and to keep embracing the spectacular opportunities ahead with conviction and confidence.

I would like to thank our Chairman, Mohammad Abunayyan, for the opportunity he gave me to partner with him and who implicitly trusted me, gave me the freedom to do my best and stood by me throughout. I would also like to give thanks to the many Board members who served the Company today and have served the Company in the past, all of whom I have had the privilege to work with and the wise counsel I benefited from. And last but not the least, to the management team and all my ACWA Power colleagues, for everything they have done so passionately and consistently and for the trust and respect they gave me, the grace with which they tolerated me and for never giving up on me.

Looking ahead

Looking ahead

2023 is set to be another exciting year and we look forward to working harder and further in sustaining the growth of our portfolio at home and abroad. The work we are doing is more relevant than ever today. The products and services we provide are an integral part of people’s lives; they are now more needed than ever to limit climate change and preserve the planet for future generations without compromising quality of life or economic growth. We are providing access to potable water and electricity for many people who have not yet had adequate supply or any supply at all. We well recognise the huge responsibility we have towards first and foremost our customers who rely on us to keep the power on and the water running, reliably and responsibly. We also respect our obligation to safeguard the interest of our shareholders, our wider stakeholders, the environment, and the communities we serve.

Allow me to take a moment to thank each one of now more than 4,000 colleagues at ACWA Power for their tireless work, ingenuity, and unwavering dedication; undoubtedly, without it we would not be in the leading position we are in today. The success of ACWA Power is built on the entrepreneurship, innovation, enthusiasm, and commitment of our employees but I also must give thanks and due recognition to each and every one of the family members of our employees for having given the space and support to enable our colleagues to deliver their best at ACWA Power.

Allow me also, on behalf of everyone at ACWA Power to thank all our stakeholders for trusting us and supporting us. In 2023, we renew our commitment to be a proud Saudi flagbearer and deliver on Saudi Arabia’s Vision 2030. With the full confidence in an even more exciting and successful 2023, we continue to strive to provide desalinated water to an increasingly thirsty world and to deliver energy, both electrons and now green hydrogen, contributing to the efforts of the nations we serve to improve their energy mix in favour of cleaner renewable energy sources. ACWA Power keeps accelerating the much-needed energy transition all the while walking surely towards achieving our net zero emissions ambition by 2050.

Paddy Padmanathan
President & CEO

to develop the largest single-site concentrated solar power (CSP) project in the world

Noor Energy 1, Dubai

With a total project cost of SAR 17.2 billion, the 950 MW hybrid project (700 MW CSP and 250 MW PV) has a 260 m solar tower and the world’s largest thermal energy storage, enabling it to operate 24/7. When completed, it will deliver electricity at a levelised tariff of 7.3 cents per KW/h, the lowest for a CSP plant currently in the world. The project is expected to start full commercial operations by Q4 2023.

The ingenuity