ACWA Power acquires $144m stake in Jordan's CEGCO
Saudi firm buys 65% stake in Enara, CEGCO's parent company, from JDC
ACWA Power International, a Saudi Arabian firm, announced on Sunday that it had entered into a binding agreement with Jordan Dubai Capital to acquire a controlling stake in Jordan’s Central Electricity Generation Company (CEGCO), valued at $144m.
A specialist in developing privately owned and financed power generation and desalinated water production plants, ACWA Power has established a strong presence in the Kingdom, and now plans to expand into the regional market. In 2010, the company bought the Barka 1 IWPP in the Sultanate of Oman.
“This acquisition is a culmination of a longstanding endeavour to establish a presence in Jordan and contribute to increasing Jordan’s electricity generation capacity to keep pace with its rapidly growing demand, all the while also being mindful of utilising the scare fuel resources in the most efficient manner possible,” Mohammed Abunayyan, chairman of ACWA Power, said in a statement.
CEGCO is the largest power generator in Jordan. It controls seven power generation complexes nationwide, totalling 1,700MW of installed power capacity.
The company has a mixed portfolio of technology and fuel types, which meets around 59% of the country’s current electricity consumption.
The company is held under a majority ownership of 51% by Enara Energy Investments. Jordan Dubai Capital owns a 65% stake in Enara, and it is this stake that ACWA will acquire from Jordan Dubai Capital.
Once the deal is completed, ACWA Power will own a 65% controlling stake in Enara, while Malakoff, the Malaysian electricity company, and the Athens-based Consolidated Contractors Company, will continue to own respective stakes of 25% and 10% in Enara.
CEGCO will continue to be divided in an ownership scheme that sees 40% of the company owned by the Jordanian government. The Social Security Corporation of Jordan owns 9%, while Enara owns the remaining 51%.
Paddy Padmanathan, president and CEO of ACWA Power, said that in order to sustain the rapid pace of socio-economic development in Jordan, power generation capacity needed to double. He added that the energy company’s prime objective was to keep its focus on reducing the cost of power production and desalinated water.
In line with these objectives, Padmanathan said that the company would continue to support the government’s initiatives to improve efficiency, diversify fuel sources to include renewable energy and expand capacity.
“ACWA Power will leverage on its own capability, capacity and credibility to help the Jordanian government in spurring and sustaining the development of the Kingdom as envisaged in their 2020 energy strategy,” he explained.