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ACWA Power to Develop Three Power Projects in Uzbekistan

Saudi ACWA Power-generating windmills are pictured in Jbel Sendouq, on the outskirts of Tangier, Morocco, on June 29, 2018. REUTERS/Youssef Boudlal/File Photo
Saudi ACWA Power-generating windmills are pictured in Jbel Sendouq, on the outskirts of Tangier, Morocco, on June 29, 2018. REUTERS/Youssef Boudlal/File Photo
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ACWA Power to Develop Three Power Projects in Uzbekistan

Saudi ACWA Power-generating windmills are pictured in Jbel Sendouq, on the outskirts of Tangier, Morocco, on June 29, 2018. REUTERS/Youssef Boudlal/File Photo
Saudi ACWA Power-generating windmills are pictured in Jbel Sendouq, on the outskirts of Tangier, Morocco, on June 29, 2018. REUTERS/Youssef Boudlal/File Photo

Uzbekistan and Saudi Arabia have planned three major power projects that will promote the use of clean and renewable energy in the Central Asian country.

Following the agreements signed in March 2020, cooperation between the Uzbekistan Ministry of Energy, the Ministry of Investment and Foreign Trade, and the Saudi company ACWA Power have led to three major milestones in the development of power projects, which are Uzbekistan’s ambitious energy Capacity by 2500MW to enable the transformation plan and increase energy, the Uzbek Ministry said in a press release.

The ground-breaking ceremony of the 1500MW Shirdia CCGT plant, followed by the signing of two Power Purchase Agreement and Investment Agreement for two wind power plants located in Bukhara and Navoi, was held in the presence of Deputy Prime Minister and Minister of Investments and Foreign Trade Sardor Umurzakov, Energy Minister Alisher Sultanov, as well as a Saudi Arabian delegation led by Saudi Minister of Investment Khalid al-Falih, and Saudi Ambassador to Uzbekistan Hisham Mishal Al- Suwailem.

ACWA Power will deliver these three projects using its technical knowledge, expertise, and experience, contributing directly to meeting Uzbekistan’s growing annual electricity demand that is expected to reach 110 billion kWh by 2030.

Saudi Minister of Investment Khalid al-Falih said the projects, which have an estimated total investment value of USD2.5 billion, will contribute directly to the growth of power generation capacity in Uzbekistan to keep pace with an increasing demand that is expected to reach 18 gigawatts/h by 2030.

Falih said that Saudi Arabia has a long history and a leading global position in the field of energy, pointing out that renewable energy in the Kingdom today has ambitious programs and a promising future, especially in light of rich resources in solar energy, wind energy, and competing expertise to develop these programs.

This is embodied in enabling the renewable energy sector, within its national energy mix, as it aims to raise the level of electricity production using renewable energy by 50 percent in 2030, while the remaining percentage will depend on gas production, according to the minister.

Falih pointed out that Saudi Arabia has ambitious plans in many other fields of renewable energy, as it launched, during the past year, several projects and initiatives in this context, including The Green Hydrogen Production Project in NEOM.

The Kingdom, as part of its interest in sustainable development, also initiated the circular carbon economy approach, which was endorsed by the leaders of the G20 countries, and represents a comprehensive, integrated and realistic approach to managing emissions that contribute to global warming, as well as its possible application in line with each country's priorities and circumstances.

For his part, Sultanov said that increasing Uzbekistan’s clean energy capacity includes a number of development and investment targets.

“By executing our plans efficiently, we will only attract more investment to Uzbekistan, and improve the energy situation of our country. The ministry extends its deepest thanks to ACWA Power and the extensive Saudi delegation to make this victory. We look forward to a long and fruitful work, "he said.

ACWA Power is also committed to training and upskilling 1000 local employees in Uzbekistan during the project’s construction and operation phases, generating long-term socio-economic value through knowledge sharing and job creation.

Mohammad Abunayyan, chairman of ACWA Power, said: “As a proud Saudi company, we are privileged to play a vital role in supporting Uzbekistan’s decarbonization efforts and energy transformation, stemming from the international cooperation between Saudi Arabia and Uzbekistan under their progressive and visionary leadership."

"Through the addition of new renewable energy capacity, exploration of innovative technologies and the advancement of cleaner, more efficient and cost-competitive gas power, ACWA Power is expanding its presence in Uzbekistan, a high growth market, leveraging our global expertise and technical know-how to create long-term and sustainable value for the country’s local communities,” Abunayyan added.

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Saudi Arabia Raises $12 Billion in International Bonds Amid Strong Demand

Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
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Saudi Arabia Raises $12 Billion in International Bonds Amid Strong Demand

Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).

Saudi Arabia has raised $12 billion from global debt markets in its first international bond issuance of the year, attracting bids worth nearly $37 billion. This demonstrates strong investor appetite for Saudi debt instruments.

The issuance comes just two days after the approval of the 2025 annual borrowing plan by Minister of Finance Mohammed Al-Jadaan. The plan estimates financing needs for the fiscal year at SAR 139 billion ($37 billion). The funds will be used to cover the projected SAR 101 billion ($26.8 billion) budget deficit for 2025, as well as repay SAR 38 billion ($10 billion) in principal debt obligations due this year.

The National Debt Management Center (NDMC) announced on Tuesday that the issuance includes three tranches: $5 billion in three-year bonds, $3 billion in six-year bonds, and $4 billion in ten-year bonds. Total demand for the bonds reached $37 billion, exceeding the issuance size by three times and reflecting robust investor interest.

The NDMC emphasized that this issuance aligns with its strategy to broaden the investor base and efficiently meet Saudi Arabia’s financing needs in global debt markets.

According to IFR, a fixed-income news service, the initial price guidance for the three-year bonds was set at 120 basis points above US Treasury yields. The six-year and ten-year bonds were priced at 130 and 140 basis points above the same benchmark, respectively.

Strong demand allowed Saudi Arabia to lower yields on the shorter-term bonds, further demonstrating investor confidence. Economists noted that the pricing above US Treasuries is attractive in the current market, showcasing trust in Saudi Arabia’s economic stability and financial strategies.

International confidence

Economic experts view this successful bond issuance as a testament to international confidence in Saudi Arabia’s robust economy and financial reforms. Dr. Mohammed Al-Qahtani, an economics professor at King Faisal University, said the move underscores Saudi Arabia’s commitment to diversifying financing tools both domestically and internationally. He added that the funds would support Vision 2030 projects, reduce pressure on domestic resources, and attract strong international investor interest.

The issuance strengthens Saudi Arabia’s ability to meet financial needs, expand its investor base, and establish a global financing network, he said, noting that it also facilitates entry into new markets, enabling the Kingdom to accelerate infrastructure projects and capital expenditures.

Dr. Ihsan Buhulaiga, founder of Joatha Business Development Consultants, described the 2025 budget as expansionary, aimed at meeting the financing needs of economic diversification programs. He stressed that the budget deficit is an “optional” one, reflecting a deliberate choice to prioritize Vision 2030 initiatives over immediate fiscal balance.

Buhulaiga explained that the Kingdom’s approach balances two options: limiting spending to available revenues, which would avoid deficits but delay Vision 2030 initiatives, or borrowing strategically to fund Vision 2030 goals. He said that the annual budget is just a component of the larger vision, which requires sustained funding until 2030.

He continued that Saudi Arabia’s fiscal space and creditworthiness allow it to borrow internationally at competitive rates, explaining that this flexibility ensures financial sustainability without compromising stability, even during challenges like the COVID-19 pandemic.

Saudi Arabia’s debt portfolio remains balanced, with two-thirds of its debt domestic and one-third external. As of Q3 2024, public debt stood at approximately SAR 1.2 trillion, below the 30% GDP ceiling. According to the Ministry of Finance, the budget deficit is expected to persist through 2027 but remain below 3% of GDP.

Buhulaiga highlighted the importance of capital expenditure, which reached SAR 186 billion in 2023 and is projected to rise to SAR 198 billion in 2024, a 6.5% increase.

He emphasized the government’s pivotal role in economic diversification, supported by investments from the Public Investment Fund (PIF), the National Development Fund, and its subsidiaries, including the Infrastructure Fund.

The PIF recently announced a $7 billion Murabaha credit facility, facilitated by Citigroup, Goldman Sachs International, and JPMorgan. Meanwhile, the NDMC arranged a $2.5 billion revolving credit facility earlier in January, compliant with Islamic principles, to address budgetary needs.

In November, Moody’s upgraded Saudi Arabia’s credit rating to Aa3, aligning with Fitch’s A+ rating, both with a stable outlook. S&P Global assigns the Kingdom an AA-1 rating with a positive outlook, reflecting a high ability to meet financial obligations with low credit risk.

The IMF estimates Saudi Arabia’s public debt-to-GDP ratio at 26.2% in 2024, describing it as low and sustainable. This is projected to rise to 35% by 2029 as foreign borrowing continues to play a key role in financing deficits.