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ACWA Power announced last week their fully owned subsidiary namely Saudi Arabian Water and Electricity Company (SAWEC) acquired a 6% indirect shareholding in Shuqaiq Water and Electricity Company (SqWEC) from Mitsubishi Corporation of Japan.
SqWEC owns an 850 MW power generation and 212,000 cubic meters per day of water desalination capacity IWPP Plant in Shuqaiq on the western shores of Saudi Arabia 130 km north of Jizan. The project started commercial operations in May 2010.
Prior to this acquisition, SqWEC was owned by a group of government and private sector investors.
The public part of the consortium was owned by the Public Investment Fund (32%) and Saudi Electricity Company (8%). Three companies had invested in SqWEC through their holding company Shuqaiq International Water and Electricity Company (SIWEC): ACWA Power (through SAWEC) owned 34%, Gulf Investment Corporation (GIC), 20 % and Mitsubishi Corporation, 6%.
The 6% indirect stake of Mitsubishi Corporation (MC) of Japan was acquired by ACWA Power by purchasing all of MC's shares in SIWEC. ACWA Power through SAWEC had signed a Share Purchase Agreement for this purpose with MC on July 29, 2013. The deal increases ACWA's stake in SqWEC from 34% to 40%.
Paddy Padmanathan, CEO of ACWA Power, stated:
Acquiring these shares was a part of ACWA Power's wider strategy to deploy its capital in earnings accretive and value creating transactions. This transaction represented such an opportunity to ACWA Power and furthermore also gave an opportunity to increase its stake in a project which was completed before time and below budget and where ACWA Power is the lead developer.
ACWA Power is a developer, investor, co-owner and operator of a portfolio of plants with an investment value in excess of $23 billion.