Baker & McKenzie Ltd., Bahrain, acted as legal advisors for APICORP while Ashurst LLP’s Riyadh office advised ACWA Power

The Arab Petroleum Investments Corporation (APICORP) and Saudi Arabia-based developer, investor and operator of power generation and desalinated water plants worldwide, ACWA Power, have signed a $125m five-year Shariah-compliant corporate facility to support ACWA Power’s future growth pipeline.

The agreement is aligned with APICORP and ACWA Power’s shared mission of accelerating the energy transition in the MENA region and globally through green technologies, which currently comprise more than 15% of APICORP’s financing portfolio. The facility has been earmarked for funding ACWA Power’s investments in renewable projects in the countries it operates in, as well as future high-growth markets.

The five-year tenor is aimed at financing a typical renewable project’s initial life cycle, enabling greater financial strength during the early development phase. Moreover, the APICORP facility can also be utilised as a revolver loan during the initial three-year period, whereby it could be settled and redrawn as per ACWA Power’s liquidity needs, enabling the company to recycle capital and increase financial capacity for further portfolio development and growth.

Commenting on the agreement, managing director of corporate banking at APICORP, Nicolas Thévenot said: "Backing the sustainable development of the Arab energy sector through innovative financing solutions continues to be a strategic priority for APICORP. Worldwide and across the MENA region, we are witnessing a concerted drive to accelerate the share of renewables in the energy mix through the adoption of innovative, low-carbon technologies and solutions. This agreement further cements our longstanding partnership with ACWA Power to build a renewable, more sustainable energy future."

Meanwhile, the chief financial officer for ACWA Power, Kashif Rana said: "APICORP’s $125m facility will serve as an important funding source to support the agile and robust expansion of ACWA Power’s ‘green’ portfolio across markets. The revolving feature of this facility offers ACWA Power the flexibility to reallocate and thus optimize its utilisation. We look forward to continuing our collaboration with APICORP as we actively seek to unlock renewable energy potential and deliver long-term, sustainable value to nations, backed by our strong ESG framework."

In October 2020, APICORP provided a $70.5m commitment to support ACWA Power and other co-sponsors to develop Phase 5 of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai, UAE, the world’s largest single-site solar park.

Baker & McKenzie Ltd., Bahrain, acted as legal advisors for APICORP on this transaction while Ashurst LLP’s Riyadh office advised ACWA Power.