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ACWA Power to Develop $677 Mln Desalination Project in Saudi Arabia

Al-Fadley and Abunayyan during the signing. (Asharq Al-Awsat)
Al-Fadley and Abunayyan during the signing. (Asharq Al-Awsat)
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ACWA Power to Develop $677 Mln Desalination Project in Saudi Arabia

Al-Fadley and Abunayyan during the signing. (Asharq Al-Awsat)
Al-Fadley and Abunayyan during the signing. (Asharq Al-Awsat)

ACWA Power has signed water purchase agreements for the 600,000 cubic meter per day Rabigh 4 Independent Water Plant (IWP) in Saudi Arabia.

Valued at around SAR 2.54 billion ($677 million), the reverse osmosis plant will serve Makkah and Madinah regions, which typically see a spike in demand during Ramadan and the annual Hajj season.

The Saudi Water Partnership Company (SWPC) will be the sole buyer of services for the project, which is located on the Red Sea coast in Saudi Arabia.

The agreements were signed by Saudi Minister of Environment, Water and Agriculture Abdulrahman al-Fadley, and Chairman of ACWA Power Mohammad Abunayyan, in the presence of Marco Arcelli, Chief Executive Officer of ACWA Power, and Raad Al-Saady, Managing Director and Vice Chairman of ACWA Power.

In this regard, Al-Fadley said:“These agreements will achieve the goals for water production projects in partnership with the private sector that supplies industries, communities, and people across the Kingdom of Saudi Arabia.”

“We expect that Rabigh 4 will directly serve pilgrims from around the world in the holy cities of Makkah and Madinah and serve households in the wider region.

We hope that this project serves as a testament to this vital sector and shows how the private sector can improve the quality of services, realize investment efficiencies, and foster innovation—all of which are objectives of Vision 2030,” added the minister.

Eng. Khalid bin Zuwaid Al-Quraishi, Chief Executive Officer, SWPC, said: “Rabigh 4 has been designed to use less electricity, lower operating costs, and support local content across both supply chain and employment.” This plant will be operational in 2026, he noted.

ACWA Power currently operates Rabigh 3 IWP in the area with the same capacity as Rabigh 4.

“We are honored to partner with the SWPC and leverage our expertise as a market leader in water desalination," said Mohammad Abunayyan, Chairman of ACWA Power.

"Our commitment to developing efficient and reliable projects that meet the practical water needs of the community has played a significant role in our contribution towards Saudi Arabia's clean water strategy, including supplying nearly a third of the nation's water needs.”

With Rabigh 4 IWP, ACWA Power will double its desalination capacity in Rabigh Area. Financial close for the project is expected during the third quarter of 2023.

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Euro Falls as Markets Brace for French Post-election Gridlock

A participant holds a French flag during an election night rally following the first results of the second round of France's legislative election at Place de la Republique in Paris on July 7, 2024. (AFP)
A participant holds a French flag during an election night rally following the first results of the second round of France's legislative election at Place de la Republique in Paris on July 7, 2024. (AFP)
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Euro Falls as Markets Brace for French Post-election Gridlock

A participant holds a French flag during an election night rally following the first results of the second round of France's legislative election at Place de la Republique in Paris on July 7, 2024. (AFP)
A participant holds a French flag during an election night rally following the first results of the second round of France's legislative election at Place de la Republique in Paris on July 7, 2024. (AFP)

The euro slipped on Sunday after projections from France's election pointed to a hung parliament and an unexpectedly strong showing for the left-wing New Popular Front, casting fresh uncertainty over markets and setting the stage for further volatility ahead.

Analysts said markets would likely be relieved that Marine Le Pen’s far-right National Rally (RN) was forecast to come third after last week's first-round victory.

Yet investors also have concerns that the French left’s plans could unwind many of President Emmanuel Macron’s pro-market reforms. And they believe political gridlock could end attempts to rein in France's debt, which stood at 110.6% of gross domestic product (GDP) in 2023.

The euro fell 0.2% to $1.081 as the week’s trading got underway. It had climbed last week as opinion polls suggested a hung parliament was likely, assuaging fears of a far-right victory, after dropping sharply - along with stocks and bonds - when Macron called the elections in early June.

"It looks like the anti-far right parties really got a lot of support," said Simon Harvey, head of FX analysis at Monex Europe.

"But fundamentally from a market perspective, there’s no difference in terms of the outcome. There’s really going to be a vacuum when it comes to France’s legislative ability."

Harvey added: "The bond market is going to be the real place to look at. There might be a bit of a gap lower in French bonds (prices)."

Trading in French bonds and stocks will begin on Monday morning in Europe.

The leftist alliance, which gathers the hard left, the Socialists and Greens, was forecast to win between 172 and 215 seats out of 577, according to pollsters' projections based on early results from a sample of polling stations.

Macron’s centrist alliance was projected to win 150-180 seats, with the RN seen getting 115 to 155 seats.

Analysts said a period of volatility and uncertainty was expected to continue as investors now assess what form the parliament will take, and how many, if any, of its policies the leftist alliance will be able to implement.

The New Popular Front alliance says its first moves would include a 10% civil servant pay hike, providing free school lunches, supplies and transport while raising housing subsidies by 10%.

"The economic program of the left is in many ways much more problematic than that of the right, and while the left will not be able to govern on their own, the outlook for French public finances deteriorates further with these results," said Nordea chief market analyst Jan von Gerich.

JITTERY MARKETS

Markets tumbled after Macron gambled in June by calling a parliamentary election following a trouncing at the hands of the RN in European Parliament elections - as investors worried an RN victory could install a prime minister intent on a high-spending, France-first agenda that would exacerbate a large debt pile and shake relations with Europe.

The risk premium investors demand to hold the country's debt soared to its highest level since the euro zone crisis in 2012. French stocks, led by banks, dropped as investors worried about their holdings of government debt, new regulation and economic uncertainty in the euro area's second biggest economy.

Yet equities, bonds and the euro all recovered somewhat last week as polls showed a hung parliament was the most likely outcome as the left wing and centrist parties struck deals to give anti-RN candidates a better chance.

The exact make-up of the next parliament remains uncertain, as does the next prime minister. Gabriel Attal said he would hand his resignation to Macron on Monday.

"It’s going to be very hard to actually go ahead and pass any policy and bring about any progressive reforms because each party’s vote is split and no one has an absolute majority," said Aneeka Gupta, director of macroeconomic research at WisdomTree.

Yet she added: "I think the markets will be happy we’re avoiding this extreme situation with the far right."