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In mid-September, the Saudi International Water and Energy Works Company “ACWA Power” private placement for institutional investors was fully subscribed in a matter of minutes. The Company is valued at $10.9 billion at the high end of the offering price range.
Saudi Arabia is making strides at diversifying its economy away from oil. The project is being executed in NEOM with the help of $430 billion in funding from the Public Investment Fund (PIF). ACWA Power has completed 64 projects worth SR248 billion in 13 countries across three continents.
This is the largest offering on the Saudi Stock Exchange since the Saudi Government sold 2% of Aramco in a public offering in 2019. Investors were able to enter the Saudi oil sector thanks to Aramco record IPO. On the other hand, the ACWA Power offering demonstrates the Saudi Arabian Government desire to promote renewable energy projects and invest in hydrogen energy, as outlined in the Saudi Arabia strategy.
Why did Saudi Arabia decide to invest in areas other than oil? The Kingdom plans to make a significant investment in the $700 billion hydrogen market. One such plan seeks to construct a $5 billion plant that will be fully powered by wind and solar power, making Saudi Arabia one of the world-leading producers of green hydrogen. We are all excited to kick off this enormous project in NEOM in 2025, and then export the completed product to global markets for use as a biofuel in transportation and communication networks.
This is not the only renewable energy initiative we are working on; the Sakaka Project, which uses solar energy to generate power, is one of the Kingdom other initiatives. This is how we are pursuing our strategic goal of reducing reliance on oil and achieving a 50% renewable energy target by 2030.
This is how we quietly strive to achieve our objectives and create significant economic opportunities.