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Saudi Arabia’s ACWA Power to Finance Solar Project in Uzbekistan

Marco Arcelli, Chief Executive Officer of ACWA Power, with representatives of financing companies (Asharq Al-Awsat)
Marco Arcelli, Chief Executive Officer of ACWA Power, with representatives of financing companies (Asharq Al-Awsat)
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Saudi Arabia’s ACWA Power to Finance Solar Project in Uzbekistan

Marco Arcelli, Chief Executive Officer of ACWA Power, with representatives of financing companies (Asharq Al-Awsat)
Marco Arcelli, Chief Executive Officer of ACWA Power, with representatives of financing companies (Asharq Al-Awsat)

Saudi-listed ACWA Power, the world's largest private water desalination company, has signed financing agreements for Tashkent’s Riverside power plant in Uzbekistan.

The greenfield development will involve the development of a 200MW solar photovoltaic (PV) plant and a 500MWh BESS that will serve to stabilize the Uzbek grid, ACWA Power said Monday.

The total investment cost of the project is 2 billion Saudi Riyals, according to a statement issued by ACWA Power to the Saudi Stock Exchange (Tadawul).

Clean energy specialist, ACWA Power, said it wholly owns the Riverside Power Station project in Tashkent.

It added that ACWA Power Riverside Solar Energy Holding secured 1.4 billion Saudi Riyals for 19 years with the aim of developing, financing, designing, constructing and operating the power plant.

The funding it secured was provided by a consortium of development finance institutions, funds and international commercial lenders including the European Bank for Reconstruction and Development (EBRD), Proparco, DEG, Islamic Development Bank (IsDB), Standard Chartered Bank and KFW-IPEX Bank.

“In a world that is looking for greater participation of private capital in emerging markets to support growth and decarbonization, Uzbekistan is a case study under the vision and leadership of its Government and lenders like EBRD, DEG, Islamic Development Bank, Proparco, KfW-IPEX Bank and Standard Chartered,” said Chief Executive Officer of ACWA Power Marco Arcelli.

He added that the agreement for the Tashkent Riverside project reflects the strong trust placed in ACWA Power as the private sector partner, and one of the global leaders in renewables and energy storage.

“This trust is built on our unparalleled track record and we look forward to the successful execution of this new project to contribute to the country's ambitious low carbon future,” Arcelli added.

Nandita Parshad, Managing Director of Sustainable Infrastructure Group at EBRD, said: “We are proud to partner with ACWA Power and co-financiers on the pioneering Tashkent Solar PV and energy storage project in Uzbekistan, the largest of its kind in Central Asia.”

“The project is core to Uzbekistan's ambition to install 25GW of renewables by 2030. This project can power 170,000 households and the battery storage capacity is equivalent to 8000 electric vehicles.”

The project will play an instrumental role in achieving Uzbekistan's ambitious targets to transition to a low-carbon economy as well as diversify its energy sources.

By 2030, Uzbekistan is aiming to generate 40% of its electricity from renewables.

The BESS will help to mitigate the effects of intermittency that are inherent in renewable energy sources, storing excess electricity generated during times of high production and make it available during periods of low production. This will ensure a constant and reliable supply of electricity to the grid, ultimately helping to meet the growing demand for energy in Uzbekistan.

Uzbekistan is ACWA Power's second-largest market in terms of investments, underscoring the company's long-standing commitment to the country. The company's current portfolio in Uzbekistan now comprises 11.6GW of power, of which 10.1GW is renewable, as well as the Republic's first green hydrogen project, with a capacity of 3,000 tons per year.

ACWA Power has recently signed a landmark $4.85 billion power purchase agreement (PPA) with the National Electric Grid of Uzbekistan for Central Asia's largest wind farm -- the Aral 5GW Wind Independent Power Producer (IPP) project in the Karakalpakstan region.

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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
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IMF: Middle East Conflict Escalation Could Have Significant Economic Consequences

Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki
Displaced families, mainly from Syria, gather at Beirut's central Martyrs' Square, where they spent the night fleeing the overnight Israeli strikes in Beirut, Lebanon September 28, 2024. REUTERS/Louisa Gouliamaki

The International Monetary Fund said on Thursday that an escalation of the conflict in the Middle East could have significant economic ramifications for the region and the global economy, but commodity prices remain below the highs of the past year.

IMF spokesperson Julie Kozack told a regular news briefing that the Fund is closely monitoring the situation in southern Lebanon with "grave concern" and offered condolences for the loss of life.

"The potential for further escalation of the conflict heightens risks and uncertainty and could have significant economic ramifications for the region and beyond," Kozack said.

According to Reuters, she said it was too early to predict specific impacts on the global economy, but noted that economies in the region have already suffered greatly, especially in Gaza, where the civilian population "faces dire socioeconomic conditions, a humanitarian crisis and insufficient aid deliveries.

The IMF estimates that Gaza's GDP declined 86% in the first half of 2024, Kozack said, while the West Bank's first-half GDP likely declined 25%, with prospects of a further deterioration.

Israel's GDP contracted by about 20% in the fourth quarter of 2023 after the conflict began, and the country has seen only a partial recovery in the first half of 2024, she added.
The IMF will update its economic projections for all countries and the global economy later in October when the global lender and World Bank hold their fall meetings in Washington.
"In Lebanon, the recent intensification of the conflict is exacerbating the country's already fragile macroeconomic and social situation," Kozack said, referring to Israel's airstrikes on Hezbollah in Lebanon.
"The conflict has inflicted a heavy human toll on the country, and it has damaged physical infrastructure."
The main channels for the conflict to impact the global economy have been through higher commodity prices, including oil and grains, as well as increased shipping costs, as vessels avoid potential missile attacks by Yemen's Houthis on vessels in the Red Sea, Kozack said. But commodity prices are currently lower than their peaks in the past year.
"I just emphasize once again that we're closely monitoring the situation, and this is a situation of great concern and very high uncertainty," she added.
Lebanon in 2022 reached a staff-level agreement with the IMF on a potential loan program, but there has been insufficient progress on required reforms, Kozack said.
"We are prepared to engage with Lebanon on a possible financing program when the situation is appropriate to do so, but it would necessitate that the actions can be taken and decisive policy measures can be taken," Kozack added. "We are currently supporting Lebanon through capacity development assistance and other areas where possible."