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Saudi ACWA Power, Uzbekistan Ministry Sign Deals Worth $2.5B

Saudi ACWA Power, Uzbekistan Ministry Sign Deals Worth $2.5B

Monday, 9 March, 2020 - 10:45
Uzbekistan's Minister of Energy and Acwa Power Chairman sign an MoU. AAWSAT AR

ACWA Power has revealed signing deals with the Ministry of Energy of Uzbekistan to amplify power generation and develop technical expertise. The three strategic agreements are potentially worth up to $2.5 billion.

The deals include a 25-year Power Purchase Agreement, PPA, and Investment Agreement – with a total investment value of $1.2 billion - for the development, construction and operation of a 1,500 MW Combined Cycle Gas-Turbine, CCGT, power plant, which shall contribute to Uzbekistan’s fast track ambitious plan to attract foreign direct investment in essential key sectors.

It will also boost the implementation of its energy diversification strategy.

ACWA Power will take the lead in constructing, engineering, operating and maintaining the plant.

The project, which has an estimated aggregate worth of $1.2 billion, will be located in Shirin City in the Sirdarya region and will be developed as a ‘Build, Own, Operate, Transfer’ projects.

The PPA has a 25-year duration, with JSC National Electric Grids of Uzbekistan acting as the sole off-taker. The CCGT plant’s efficiency rate will be over 60 percent - saving almost twice the natural gas currently used for electricity production.

The Investment Agreement for this project is signed with the Ministry of Investment and Foreign Trade.

An implementation agreement worth $550 million-$1.1 billion has also been signed with the Ministry of Energy to utilize Uzbekistan’s natural renewable energy sources. The deal envisages the development, financing, construction, operation, and maintenance of a 500-1000 MW wind farm.

The third agreement is an MoU between the Ministry of Energy of Uzbekistan, Air Products and Chemicals and ACWA Power. This agreement entails training programs to bolster the technical expertise of students and professionals at one or more colleges in Uzbekistan.

The deal will equip potential talent with the tools and knowledge to gradually support a local supply chain for the utilities and chemicals sectors in Uzbekistan.

The agreements reflect Uzbekistan’s growing role in the global energy market, its commitment to energy security and the use of the latest technologies, WAM reported. It also demonstrates Uzbekistan is becoming an attractive destination for foreign investors.

Commenting on the deals, Chairman of ACWA Power Mohammad Abunayyan said: "With our relentless pursuit to align with the pillars of the Saudi Vision 2030 and contribute effectively to achieving its aspirations and goals, we are moving forward on our path of global growth through expanding our geographical footprint and presence in Central Asia."

"With our proven track record as a global leader in the sectors of power generation and water desalination, with in-depth knowledge and expertise, we are proud to have been granted this opportunity to build strategic partnerships with the Uzbek government," he added.

The agreements inked with the Uzbek government will contribute to creating job opportunities, developing community and achieving a sustainable future for the country, Abunayyan concluded.

For their part, Prime Minister of Uzbekistan Abdulla Aripov and Minister of Energy of Uzbekistan Alisher Sultanov also commented on the event.

"We have chosen ACWA Power to be the government’s partner in upscaling Uzbekistan’s energy generation capacity because of their exceptional track record in delivering results," said Aripov.

Meanwhile, Sultanov said: "These newly agreed power projects represent a historic milestone for Uzbekistan and support our mission to strengthen energy security through self-sufficient power sources. ACWA Power’s focus on smart, energy-efficient technologies will provide more than 2000 MW of added power and enable us to achieve a more sustainable, secure and affordable energy ecosystem for our country."

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