Saudi Arabia’s Acwa Power is developing a financing strategy for sustainable infrastructure projects in Africa, according to its CEO, Marco Arcelli. The company is looking to collaborate with development institutions and local governments to foster dialogue with private investors, while ensuring the necessary guarantees are in place to mitigate investment risks. Arcelli believes that Africa’s fragmented and slow development can be accelerated by adopting a recipe that facilitates sustainable economic growth.
Investors are often hesitant to allocate funds to climate change mitigation projects in developing countries due to perceived risks, resulting in higher capital costs. Arcelli emphasizes the importance of mitigating these risks and suggests that interest rate increases further highlight the need for addressing them.
Acwa Power, backed by the Public Investment Fund, operates in 12 countries across the Middle East, Africa, Central Asia, and South-East Asia. With a diverse portfolio of 77 projects and a total investment value of $82.8 billion, the company has the capacity to generate 53.69 gigawatts of power and manage 7.6 million cubic meters of desalinated water per day.
In addition to its focus on Africa, Acwa Power recently announced a new green hydrogen project in Uzbekistan. The project includes a 3,000-tonne green ammonia pilot and is expected to generate 500,000 tonnes of green ammonia annually using 2.4 gigawatts of wind energy.
The shift towards renewable energy in Uzbekistan aligns with its goal to raise the share of renewable energy in total electricity supply to 25% by 2030. The country’s clear targets for renewable energy have attracted private investors and created opportunities for concrete discussions.
The financing strategy developed by Acwa Power aims to accelerate the adoption of clean energy in Africa and overcome the barriers to investment. By collaborating with development institutions, local governments, and private investors, the company seeks to drive sustainable economic growth on the continent.