ACWA Power, Uzbekistan Ministry Sign US$2.5 Billion Energy Security Agreements
Faizan Hashmi Published March 08, 2020 | 06:30 PM
TASHKENT, Uzbekistan, (UrduPoint / Pakistan Point News / WAM - 08th Mar, 2020) ACWA Power has announced the signing of three new strategic agreements, potentially worth up to US$2.5 billion, with the Ministry of Energy of Uzbekistan to amplify power generation and develop technical expertise.
The agreements include a 25-year Power Purchase Agreement, PPA, and Investment Agreement – with a total investment value of US$1.2 billion - for the development, construction and operation of a 1500 MW Combined Cycle Gas-Turbine, CCGT, power plant.
The 1,500 MW CCGT power plant shall contribute to Uzbekistan’s fast track ambitious plan to attract foreign direct investment in essential key sectors and the implementation of its energy diversification strategy. The project will be located in Shirin City in the Sirdarya region and will be developed as a ‘Build, Own, Operate, Transfer’ projects. ACWA Power will take the lead in constructing, engineering, operating and maintaining the plant.
The project has an estimated aggregate worth of $1.2 billion. The PPA has a 25-year duration, with JSC National Electric Grids of Uzbekistan acting as the sole off-taker. The CCGT plant’s efficiency rate will be in excess of 60 percent - saving almost twice the natural gas currently used for electricity production. The Investment Agreement for this project is signed with the Ministry of Investment and Foreign Trade.
An implementation agreement worth US$550 million-US$1.1 billion has also been signed with the Ministry of Energy to utilise Uzbekistan’s natural renewable energy sources. The agreement envisages the development, financing, construction, operation and maintenance of a 500-1000 MW wind farm.
The third agreement is an MoU between the Ministry of Energy of Uzbekistan, Air Products and Chemicals and ACWA Power. This agreement entails training programmes to bolster the technical expertise of students and professionals at one or more colleges in Uzbekistan. It will equip potential talent with the tools and knowledge to gradually support a local supply chain for the utilities and chemicals sectors in Uzbekistan.
The agreements reflect Uzbekistan’s growing role in the global energy market, its commitment to energy security and use of the latest technologies. It also demonstrates Uzbekistan is becoming an attractive destination for foreign investors.
"Our collaboration with ACWA Power will enable the government to benefit from the strong private sector participation which we believe is vital for Uzbekistan’s ongoing transformation and growth. We look forward to working with ACWA Power and building on this partnership in the future", Aripov elaborated.
Alisher Sultanov, Minister of Energy of Uzbekistan said, "These newly agreed power projects represent a historic milestone for Uzbekistan and support our mission to strengthen energy security through self-sufficient power sources. ACWA Power’s focus on smart, energy efficient technologies will provide more than 2000 MW of added power and enable us to achieve a more sustainable, secure and affordable energy ecosystem for our country."
Mohammad Abunayyan, Chairman of ACWA Power, said, "With our relentless pursuit to align with the pillars of the Saudi Vision 2030 and contribute effectively to achieving its aspirations and goals, we are moving forward on our path of global growth through expanding our geographical footprint and presence in the central Asia. The market in this part of the world is thriving with economic activity that will stimulate private sector investment and participation in the energy sector".
"With our proven track record as a global leader in the sectors of power generation and water desalination, with in-depth knowledge and expertise, we are proud to have been granted this opportunity to build strategic partnerships with the Uzbek government. Our partnership will deepen the friendly economic relations between the Kingdom of Saudi Arabia and the Republic of Uzbekistan, and will allow us to utilize our capabilities to unlock the tremendous growth potential of the energy sector in Uzbekistan," Abunayyan added.
He noted that the signing of the three agreements with the Uzbek government highlights the pivotal role of the Saudi private sector in the Saudi economy and in fortifying the base of Saudi investments abroad as well as fruitful economic relations between Saudi Arabia and friendly countries.
The agreements inked with the Uzbek government will contribute to creating job opportunities, developing community and achieving a sustainable future for the country, the ACWA Power Chairman concluded.