Bloomberg Agency revealed, on Friday, that the planned initial public offering of the Saudi company, ACWA Power International, amounting to about $ 1.2 billion, which is scheduled to be priced later this month, has attracted great interest from investors, which is the highest since the IPO. Aramco oil company.
Investors are looking to deal with companies seen as key to the Saudi government's plans to diversify its economy away from crude oil.
Sources familiar with the process told Bloomberg that the initial offering received orders worth several billion dollars, and advisors will have to determine the allocation process for institutional investors.
While Aramco's record IPO in 2019 allowed investors to own a share of Saudi Arabia's oil wealth, ACWA Power, which specializes in operating power generation and water desalination plants, provides them access to renewable energy and hydrogen projects that Riyadh sees as its future.
Naveed Naz, the financial controller of the Saudi family group "Al-Jammaz", said: "It is expected that the subscription of ACWA Power will be very popular."
"We expect the company to be able to implement its growth plans, and to triple in size within 7-10 years," he added.
ACWA Power, half of which is owned by the Saudi Public Investment Fund (the sovereign fund), is expected to complete at least 70% of renewable energy projects in the Gulf country by 2030, at a time when the country expects to achieve its net-emission target. Zero before the current target in 2050.
Thamer Al-Saeed, chief investment officer at Mada Investment Company, believes that the subscription in ACWA Power shares will exceed the supply by a large rate. Because of the nature of the offering, which depends on increasing the capital and not exiting or selling.
Sources, who requested anonymity before the completion of the offering, told Bloomberg that the sovereign fund, which increased its stake in the energy-producing company late last year, is not looking to sell any of its shares.
The company's initial public offering comes as Saudi companies backed by the $430 billion sovereign fund are leading the way in new offerings on the Middle East's largest stock exchange, where IPOs are scarce in the region.
The largest economy in the Arab region put another forward in the direction of crystallizing its strategy related to the transition to alternative energy with the completion of raising funds for one of the largest solar energy projects in the world, which will be led by an alliance of local companies, led by ACWA Power, which specializes in renewable energy solutions and the oil giant Aramco .
Saudi Arabia plans to dominate the $700 billion hydrogen market. Therefore, it is building a factory at a cost of 5 billion dollars that runs entirely on energy generated from the sun and wind in "NEOM", which has an investment of half a trillion dollars.
The Gulf country wants to be among the world's largest producers of green hydrogen when the project, in which ACWA Power shares a third in the mega-city of NEOM, opens in 2025, as part of its first steps to create a global hydrogen market.
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