ACWA Power Signs Deals for First Wind Project in Azerbaijan

Saudi Minister of Energy Prince Abdulaziz Bin Salman. - SPA
Saudi Minister of Energy Prince Abdulaziz Bin Salman. - SPA
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ACWA Power Signs Deals for First Wind Project in Azerbaijan

Saudi Minister of Energy Prince Abdulaziz Bin Salman. - SPA
Saudi Minister of Energy Prince Abdulaziz Bin Salman. - SPA

Following the signing of the implementation agreement for the $300 million Independent Power Project in January 2020, ACWA Power Tuesday executed the official agreements for the 240 MW wind power project that will be located in the Absheron and Khizi regions.

The virtual signing ceremony was attended by Minister of Energy Prince Abdulaziz Bin Salman, Azerbaijan Minister of Energy Parviz Shahbazov and Balababa Rzayev, president of Azerenerji OJSC, and Mohammad Abunayyan, chairman of ACWA Power.

Key agreements signed by ACWA Power, a leading Saudi developer, investor and operator of power generation and water desalination plants in high growth markets, included the signing of the Investment Agreement with the government of the Republic of Azerbaijan, represented by the Ministry of Energy.

ACWA Power also signed the Power Purchase Agreement and Transmission Connection Agreement with Azerenerji OJSC, the national electrical power company and off-taker for the project, state news agency SPA reported.

Though Azerbaijan has relied largely on natural gas to meet its energy needs, the focus is now on diversification and boosting of alternative energy resources. Renewables offer the most prominent solution to meeting Azerbaijan’s ambitious climate targets.

The country has committed to reducing its greenhouse gas (GHG) emissions by 35% by 2030, under the Paris Agreement, which emphasizes the use of alternative and renewable energy sources to achieve this target.

With its excellent wind resources, Azerbaijan’s move towards effectively harnessing wind as a sustainable energy source is being fast tracked by key public private partnerships.

As the first foreign investment based independent wind power project in Azerbaijan structured as a public-private partnership, the plant will contribute to reach Azerbaijan’s target of 30% of renewable energy capacity by 2030.

Once complete, it will power 300,000 households and 400,000 tons of emissions will also be offset each year, supporting the country’s green ambitions.

Speaking to the Saudi Press Agency, Prince Abdulaziz said: “The Kingdom of Saudi Arabia and Azerbaijan enjoy long-term diplomatic and economic relations, and cooperation between the two countries has been strengthened recently through their participation in OPEC+.

“Azerbaijan, along with other member countries played an important role in promoting stability in global oil markets. We appreciate Azerbaijan's efforts to fulfil its obligations under the Declaration of Cooperation, and the high level of compliance it has achieved.”

He also expressed his confidence in the role that ACWA Power will play in promoting and expanding the cooperation between the Kingdom of Saudi Arabia and the Republic of Azerbaijan, and in supporting the efforts of the Azerbaijani government to meet its national needs of electric energy feasibly, economically and in adherence to international standards.

For his part, Shahbazov said: “The signing of Agreements and implementation of the Project is an indication of the confidence in the business climate in Azerbaijan and will mark a next stage of economic cooperation between our countries.

“I am confident that after ‘ACWA Power’ - other companies from Saudi Arabia will follow suit and will invest in Azerbaijan."

“Concerning the importance of this project for Azerbaijan, I would like to stress that in addition to being first ever foreign investment based IPP, the wind power station annually will help to generate 1 billion KWh electricity, saving up to 220 million cubic meters of gas, cutting down on 400,000 tons of emissions annually, create new jobs and new production and service areas.”

As a renewable energy leader, ACWA Power’s global expertise in delivering transformative solutions at an affordable cost, will strongly support Azerbaijan in realizing its renewable energy development goals.

Abunayyan also said: “The signing of three key agreements today is a significant milestone and a strong step towards unlocking the renewable energy potential of the Republic of Azerbaijan."

“ACWA Power is honored to partner with the Ministry of Energy, in Azerbaijan and the national electric power company Azerenerji OJSC to develop the first foreign investment based independent wind power plant.”

“I express my sincere thanks to Prince Abdulaziz Bin Salman, Saudi Minister of Energy, for his guidance and presence and patronage of this signing ceremony with the Azerbaijani Ministry of Energy,” Abunayyan added.

Abunayyan also reaffirmed that the agreements signed Tuesday will contribute to Azerbaijan’s ongoing efforts to deploy renewable energy and provide a better future for upcoming generations.

Rzayev said: “According to the contracts to be signed, connecting the 240 MW power plant to be built by the company to the grid and purchasing the power to be generated by the plant will be performed by Azerenerji OJSC.

“The implementation of this project will stimulate the development of our national economy, play an important role in ensuring the energy sustainability in our country, allow for saving the gas, which is our natural resource, and have a positive impact on the environment.”

Notably, ACWA Power remains focused on extending its leadership in high-growth markets through operational excellence and technological expertise, delivering power and desalinated water reliably and responsibly to communities across the globe.



Norway's Sovereign Fund Proposes Deep Cuts to US Treasury Holdings

A general view of the Norwegian central bank in Oslo, Norway March 6, 2018. Picture taken March 6, 2018. REUTERS/Gwladys Fouche
A general view of the Norwegian central bank in Oslo, Norway March 6, 2018. Picture taken March 6, 2018. REUTERS/Gwladys Fouche
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Norway's Sovereign Fund Proposes Deep Cuts to US Treasury Holdings

A general view of the Norwegian central bank in Oslo, Norway March 6, 2018. Picture taken March 6, 2018. REUTERS/Gwladys Fouche
A general view of the Norwegian central bank in Oslo, Norway March 6, 2018. Picture taken March 6, 2018. REUTERS/Gwladys Fouche

The manager of Norway's $2.3 trillion sovereign wealth fund has proposed significantly cutting its exposure to US Treasuries as part of a wider shake-up of its bond investments to improve returns, according to a letter published this week.

Norges Bank Investment Management has recommended reducing its weighting to government bonds within its benchmark bond index to 50% from 70%, with US Treasuries, the biggest holding, getting the biggest cut, according to the letter.

The changes would mean cutting nearly $80 billion from the fund's current holdings of about $215 billion of US Treasuries as of the end of June, according to Reuters calculations.

Government bond markets have been under pressure recently, with long-term borrowing costs soaring as rising inflation and government debt levels spooked investors.

Norway's sovereign wealth fund, the world's largest, owns on average 1.5% of ⁠all listed companies ⁠globally. Its scale means that portfolio decisions can influence broader market flows. Any cuts to its bond holdings are unlikely to be implemented until several months into 2027 at the earliest.

The letter containing the fund's proposals was sent in response to questions from Norway's finance ministry about the wealth fund's investment strategy for bonds.

Norges Bank IM said it would await the ministry's response, and any changes would be done gradually to limit market impact and transaction costs.

The proposals will form part of recommendations to the ministry in January.

They will be discussed ⁠as part of the fund's annual white paper process next spring, after which the ministry will make a final recommendation to parliament which will then hold a hearing, a Norges Bank IM spokesperson said.

"We recommend that the government subindex of the bond index be reduced from 70% to 50%," Ida Wolden Bache, governor of Norges Bank, and Norges Bank IM CEO Nicolai Tangen wrote in the letter.

"A government share of 50% will be sufficient to cover the liquidity needs, including in periods of turbulence in financial markets."

The fund also proposed considering an increase in investments in unlisted assets in a separate letter, in part as a way to reduce concentration risks that have grown in its equity portfolio amid the boom in the share prices of a handful of US tech companies.

Under its current mandate the fund can own unlisted real estate and renewable energy assets, but it has a lower share of unlisted investments ⁠than comparable funds.

Norges Bank IM said the biggest change to its bond index would be investing in more non-government debt, including mortgage-backed securities, to give it better diversification and exposure to risk premiums.

The spokesperson said total US dollar exposure would remain around 50%, adding: "What changes is the mix inside the dollar market: less US government debt, correspondingly more US mortgage and government-related bonds."

Under the proposals, the bond index weighting to US government bonds would reduce from 34.1% to 21.9%, according to the letter, with the allocation to euro area debt falling more modestly from 16.8% to 14.1%.

The allocation to Japanese government bonds would increase from 4.6% to 7.4%, while the UK allocation would remain unchanged at 4.2%. The fund said the changes would align the index more closely with the broader market weightings.

While US Treasuries exposure would fall, the proposed allocation to US non-government debt would jump from 16.2% to 27.6%, meaning that the overall bond index's weighting to the US dollar would fall only slightly, from 52.9% to 52.5%.

Europe's biggest pension fund, Dutch fund ABP, cut the value of its own US Treasury holdings in the first quarter of this year, Reuters previously reported.


J.P. Morgan, BNP Paribas Forecast December ECB Rate Hike

FILE PHOTO: The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. REUTERS/Kai Pfaffenbach/File Photo
FILE PHOTO: The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. REUTERS/Kai Pfaffenbach/File Photo
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J.P. Morgan, BNP Paribas Forecast December ECB Rate Hike

FILE PHOTO: The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. REUTERS/Kai Pfaffenbach/File Photo
FILE PHOTO: The logo of the European Central Bank (ECB) is pictured outside its headquarters in Frankfurt, Germany, April 26, 2018. REUTERS/Kai Pfaffenbach/File Photo

J.P. Morgan and BNP Paribas said on Thursday they expect the European Central Bank to deliver another 25-basis-point rate hike in December, as persistent inflation risks and elevated energy prices strengthen the case for further tightening.

Both brokerages had previously expected the ECB's tightening cycle to end without a December rate increase.

The revised outlooks suggest borrowing costs in the euro zone will remain elevated for longer than previously anticipated, reflecting resilient regional economic ⁠growth and ongoing energy ⁠supply concerns.

"We think the persistence of the energy shock and the resilience of the economy make second-round effects more likely to materialize," said analysts at BNP Paribas in a note.

Markets have almost fully priced in ⁠a 25-basis-point interest rate hike by the European Central Bank at its September 10 policy meeting, indicating a 99.2% probability, according to data compiled by LSEG.

Oil prices eased but remained above $95 a barrel. At the same time, eurozone bond yields retreated from multiyear highs, following recent market pressure as the escalating conflict in Iran boosted energy prices, stoking fears of persistent inflation and ⁠tighter ⁠monetary policy.

According to Reuters, J.P. Morgan said "an interaction between more persistent energy price pressures, solid growth, sticky core inflation and a neutral rate that the ECB sees edging higher" would be the reason for a further rate hike in December.

BNP Paribas expects the ECB to hike interest rates by 25 bps at its meeting next week while leaving the door wide open to delivering more if evidence of second-round effects builds.


US Sanctions Turkish Bank Golden Global Over Alleged Iran Links

ASHEVILLE, NORTH CAROLINA - SEPTEMBER 1: Treasury Secretary Scott Bessent arrives for a press conference as the 2026 G20 Financial meetings come to a close on September 1, 2026 in Asheville, North Carolina. Melissa Sue Gerrits/Getty Images/AFPages via AFP)
ASHEVILLE, NORTH CAROLINA - SEPTEMBER 1: Treasury Secretary Scott Bessent arrives for a press conference as the 2026 G20 Financial meetings come to a close on September 1, 2026 in Asheville, North Carolina. Melissa Sue Gerrits/Getty Images/AFPages via AFP)
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US Sanctions Turkish Bank Golden Global Over Alleged Iran Links

ASHEVILLE, NORTH CAROLINA - SEPTEMBER 1: Treasury Secretary Scott Bessent arrives for a press conference as the 2026 G20 Financial meetings come to a close on September 1, 2026 in Asheville, North Carolina. Melissa Sue Gerrits/Getty Images/AFPages via AFP)
ASHEVILLE, NORTH CAROLINA - SEPTEMBER 1: Treasury Secretary Scott Bessent arrives for a press conference as the 2026 G20 Financial meetings come to a close on September 1, 2026 in Asheville, North Carolina. Melissa Sue Gerrits/Getty Images/AFPages via AFP)

The US Treasury Department on Friday imposed sanctions on a Turkish bank over its alleged ties to Iran's Revolutionary Guard Corps (IRGC), as Washington pushes to economically isolate Tehran six months into their war. 

The latest action targets Golden Global Bank and its subsidiaries, which the US Treasury said "facilitated tens of millions of dollars' worth of transactions" for the IRGC. 

They were also said to have provided Tehran with "key correspondent banking access that allows it to move its funds internationally." 

The bank denied the accusations, saying it "has not concluded any banking transactions that could substantiate" the claims by the US government. 

The institution, which describes itself as "the first investment bank in Türkiye that observes the principles of interest-free banking in all its operations," said it respects "all applicable local and international banking regulations, practices and compliance requirements." 

Last week, Washington took a step towards cutting a major Egyptian bank's United Arab Emirates operations from the US financial system. 

"Financial institutions continue to find out the hard way that we are serious about Operation Economic Outcast," said US Treasury Secretary Scott Bessent in a statement. 

"While we hope no more banks will need to be sanctioned, that ultimately depends on how quickly the international community comes to its senses and ceases support of the murderous Iranian regime," he added. 

Bessent had said Tuesday that Washington would likely announce a bank sanction this week and one next week, as it tries to choke off Tehran economically. 

He was speaking on the sidelines of a Group of 20 finance leaders' gathering in Asheville, North Carolina, where he also sought to rally support from partners to put pressure on Iran. 

Iran has been at war since late February, when the United States and Israel launched a surprise bombing campaign that killed its supreme leader. 

Bessent recently vowed that the United States was declaring an "economic D-Day" on Iran, and warned of harsh consequences for countries that do not join the campaign.