Egypt is set to receive a major boost in its renewable energy capacity, as ACWA Power, a leading Saudi Arabian energy company, announced its plans to invest $10bn in the country by 2026. The company, which is the world’s largest private water desalination company, has already invested $2.5bn in Egypt, and has five projects in the country, all in the renewable sector. The new investments will be used to develop solar and wind power plants, as well as water desalination projects. The company’s CEO, Marco Arcelli, told Daily News Egypt that the company is aiming to capture a 50% share of the Egyptian renewable energy market by 2026. Daily News Egypt interviewed Arcelli to find out more about the company’s plans, latest updates, and projects in the pipeline.
What is ACWA Power’s expansion plan strategy during 2023?
ACWA Power, a Saudi Arabian energy company, is planning to grow its footprint in renewable energy, especially in solar and wind power, in existing markets such as Saudi Arabia, Morocco, Egypt, China, and CIS/ Central Asia. The company is also exploring emerging opportunities in water desalination in water-stressed areas such as Morocco, Egypt and other North African countries. The company is working with local partners and talents, as well as Chinese EPC contractors, to develop large-scale projects at low levelised costs. The company is also the first one to step into green hydrogen, a promising clean energy source.
How much investment will ACWA Power inject into Egypt during 2023?
ACWA Power has been present in Egypt since 2015, with the aim of supporting the country’s sustainable development and economic growth by providing clean and affordable energy. The company has five projects in the country, all in the renewable sector, with a total capacity of 1.42 GW. The company is also looking into ways to cooperate with the government in water solutions, as Egypt is aiming to launch several desalination projects with a total planned capacity of 8.85 million m3/day by 2050. By 2026, ACWA Power is aiming to invest up to $10bn in Egypt, a number that could increase significantly once the company begins exploring opportunities in green hydrogen and water desalination.
What are the aspects of the company’s cooperation with the Sovereign Fund of Egypt?
ACWA Power, a Saudi Arabian energy company, has formed a strategic partnership with the Sovereign Fund of Egypt (TSFE), a state-owned entity that aims to unlock value for the nation’s industries and economy. The partnership covers various aspects, such as:
- Renewable Energy Development: ACWA Power and TSFE collaborate on developing and implementing renewable energy projects in Egypt, such as the 1.1 GW wind energy project in the Gulf of Suez, which will provide clean energy to over a million households and reduce carbon emissions by 2.4 million tonnes annually.
- Technology Transfer: ACWA Power brings its expertise and experience in renewable energy technologies to the partnership, supporting the development of local capacities and skills in the sector. For example, ACWA Power cooperates with Hassan Allam Holdings, an Egyptian engineering firm, in the 1.1 GW wind project.
- Job Creation and Economic Growth: ACWA Power’s cooperation with TSFE contributes to creating employment opportunities and stimulating local economies in Egypt. The company invests up to $10bn in the country by 2026, creating thousands of direct and indirect jobs.
- Environmental Sustainability: ACWA Power and TSFE share a commitment to environmental sustainability, promoting clean energy solutions that align with Egypt’s efforts to achieve its environmental targets. The partnership also supports Egypt’s vision of generating 42% of its electricity from renewables by 2035.
- Long-term Partnerships: The ACWA Power-TSFE cooperation aims to establish long-term partnerships that extend beyond individual projects. By building strong relationships and fostering collaboration, both entities work towards achieving sustained energy sector development in Egypt.
With the global trend towards sustainability, what are your plans in this regard?
ACWA Power, a Saudi Arabian energy company, is committed to supporting the global trend towards sustainability by providing clean energy and innovative energy solutions. Our focus is on creating shared value by prioritising the growth and well-being of our employees, as well as making a positive impact in the communities where we operate. Our sustainability strategy includes the following goals:
- To triple our business mostly in renewable energy, where we aim to be in the top 3 international renewables players by 2030, aligned with the Saudi Vision 2030.
- To develop technologically advanced water desalination projects and create self-sustaining giga-cities, all powered by renewable energy sources.
- To set a net-zero emissions target for 2050 and achieve a 50% reduction in carbon intensity across our portfolio compared to our 2020 baseline figures.
- To initiate a training program on solar technology in Egypt, where we have more than 400 engineers and technicians that completed their studies.
What is the volume of investments directed towards sustainability in Egypt during 2023?
ACWA Power has five projects in Egypt, all in the renewable sector, with multi-billion dollar investments in solar and wind energy projects. Our Egyptian portfolio is 100% renewable, with a total capacity of 1.85 GW. The projects include:
- Benban Solar Park, where ACWA Power operates three solar plants with a total capacity of 120 MW. The project also includes the Benban Market Renovation Project, which has improved the market’s infrastructure and supported local vendors and employment.
- Kom Ombo Solar PV Plant, a 200 MW solar facility that will provide clean energy to more than 130,000 households and avoid over 280,000 tonnes of carbon dioxide emissions annually.
- Suez Wind Farm, a 1.1 GW wind project that will be one of the largest in the world. The project will provide energy to over a million households and displace 2.4 million tonnes of carbon dioxide emissions annually.
- Sohag Wind Project, a recently allocated land for a 10 GW wind energy project that will be developed in cooperation with the Sovereign Fund of Egypt.
ACWA Power’s sustainable investment approach extends beyond energy and water projects. The company embraces social responsibility by actively engaging with local communities and fostering economic development opportunities. By prioritizing local job creation and skills development, ACWA Power enhances local capacity and promotes inclusive growth. The company also contributes to the communities in which it operates by encouraging and developing local service providers, suppliers and the local workforce to stimulate national talent and assist in developing solutions that contribute to energy transition initiatives in those countries.
What are the projects to be completed during the current period in Egypt?
ACWA Power, a Saudi Arabian energy company, is working on three major renewable energy projects in Egypt, which are expected to be completed by 2026. The projects are:
- Kom Ombo Solar PV Plant, a 200 MW solar facility that will provide clean energy to more than 130,000 households and avoid over 280,000 tonnes of carbon dioxide emissions annually. The project secured a $123m financing package earlier this year and is expected to reach commercial operations in January 2024.
- Suez Wind Farm, a 1.1 GW wind project that will be one of the largest in the world. The project will provide energy to over a million households and displace 2.4 million tonnes of carbon dioxide emissions annually. The project is the first wind farm project by ACWA Power in Egypt and is expected to be commercially operational by the end of 2026.
- Sohag Wind Project, a recently allocated land for a 10 GW wind project in Egypt’s Western Sohag region, which will generate about 50,000 GWh of clean energy annually, providing electricity to about 11 million households and mitigating the impact of 25.5 million tonnes of carbon emissions each year. The project will be developed in cooperation with the Sovereign Fund of Egypt.
Is there a plan to enter new markets during the coming period?
ACWA Power is keen to expand its presence and activities in new markets, especially in Asia, Africa and Europe. The company is exploring opportunities to bring its expertise, partners and investment to unlock the potential for sustainable solutions like water desalination and green hydrogen. Some of the markets that ACWA Power is interested in are:
- China: ACWA Power recently signed MoUs with nine renowned Chinese entities, coinciding with the 1st China Arab Summit and President Xi Jinping’s state visit. These agreements lay the foundation for financing, investment, and construction of ACWA Power’s clean and renewable energy projects in Saudi Arabia and Belt and Road Initiative countries. China’s pursuit of clean energy is of immense importance – ACWA Power is exploring opportunities to support the country’s energy diversification plans through green solutions. The company also has a long-standing history and relationship with Chinese companies, where 60-70% of its partners and contractors are Chinese companies. The company is exploring water desalination opportunities in China and other countries, where it makes a good business case for its growth.
- CIS: ACWA Power has been actively expanding its solar and wind portfolio in Central Asia/CIS, marking a significant growth in renewable energy projects within the region. The region has abundant water resources, including the Caspian Sea and the Aral Sea, which can be used for desalination. Investing in integrated water and power projects (IWPs) in the region can lead to reduced reliance on fossil fuels, improved energy security, and better access to clean drinking water. IWPs can also contribute to economic development by attracting investments, creating job opportunities, and promoting technological advancements in renewable energy and desalination. ACWA Power’s focus on solar and wind activities in Central Asia/CIS indicates significant potential for IWPs in the region. By utilising renewable resources and water bodies, ACWA Power can play a crucial role in meeting the region’s water and power needs while promoting sustainable development.
- North Africa: ACWA Power is keen to bring its expertise, partners and investment to unlock the potential for sustainable solutions like green hydrogen and water desalination in North Africa. The company’s approach in the region is straightforward: investing in transformative projects, partnering with governments, and leveraging its expertise in renewable energy and water desalination capabilities to drive sustainable development and create long-term value for all stakeholders. For example, in Morocco, ACWA Power has been present for over a decade and has made significant investments of nearly $3.2bn. This investment has resulted in the installation of over 765 MW of renewable energy capacity. ACWA Power is committed to further investment in Morocco, with a focus on reducing tariffs and working with government partners to explore opportunities in desalination and green hydrogen technologies.
How does ACWA Power regard Egypt’s approach to green hydrogen?
ACWA Power, a Saudi Arabian energy company, regards Egypt’s approach to green hydrogen as an important step in diversifying the energy mix and reducing carbon emissions. The company appreciates Egypt’s efforts to establish partnerships and create a supportive ecosystem for the development of green hydrogen projects. The company also looks forward to collaborating with Egypt in this field, as one of the first-movers in the green hydrogen space. ACWA Power is currently developing a $5bn green hydrogen-based ammonia plant in Saudi Arabia’s Neom, and is also working with entities in countries including Oman, South Africa and South Korea, to jointly explore ways to maximise the potential of green hydrogen.