Finance

 

ACWA Power is a desalinated water and energy company with a difference. While its
competitors seek to maximise profit by securing contracts with the most-generous possible
margins, the Saudi Arabian developer, owner and operator of power and water plants defies
market pricing to win – a strategy that has earned it a success rate of two out of three tenders,
as well as a growing international footprint. With ACWA’s bids on solar developments reaching
record lows, Paddy Padmanathan (CEO) was coming under increasing scrutiny from analysts
and media pundits, who could not understand how they could sustain these record-breaking
prices. In the latest auction on 5th June 2017, the Dubai Electricity and Water Authority (DEWA)
announced it had received four bids from consortiums for the tender of a 200 MW Concentrated
Solar Power (CSP) tower project. The ACWA consortium submitted a price of USD 9.45
cents/kWh, nearly 40% below the previous world-record low price for electricity generated from
this technology. The three other bids ranged from USD 10.58 to 17.35 cents/kWh. As analysts
struggled to replicate this price in their own models, Paddy put his own team to work to
demonstrate to the world how ACWA Power’s unique financing structure could make the
improbable possible.

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Topics/Industry: energy businessrenewable energy

Publication date: 05/09/2017

Published by: Centre for Climate Finance and Investment, Imperial College Business School

Authors: Charles Donovan, Chris Corbishley

Length: 14 pages

Geography: Saudi Arabia

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