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Silk Road Fund acquires 49% stake in Uzbekistan CCGT project
ACWA Power will remain majority shareholder in 1.5GW facility in Sirdarya region
Michael Marray 21 Sep 2022

The Silk Road Fund has agreed to acquire a 49% stake in ACWA Power Uzbekistan Project Holding Company, which is developing a combined cycle gas turbine (CCGT) project in Uzbekistan.

The 1.5GW Sirdarya project, located in Shirin, southern Uzbekistan, is being developed under a build-own-operate-transfer scheme. It is scheduled for completion in early 2024. Uzbekistan’s JSC National Grid has signed a 25-year power purchase agreement as sole offtaker.

According to a filing with the Saudi Stock Exchange (Tadawul), the stake is being acquired via CVXF, a Silk Road Fund subsidiary. The transaction is expected to close in the last quarter of 2022.

The transaction value of US$130 million includes the investor's portion of an equity bridge loan in subordinated advance form. ACWA will continue to own the remaining 51% stake. Together with project debt, which has yet to be signed, the total project cost will be US$1 billion.

The agreement was finalized at a virtual signing ceremony on September 14, attended by ACWA Power chairman Mohammad Abunayyan and Silk Road Fund chairwoman Zhu Jun.

ACWA Power, a developer, investor, and operator of power generation, water desalination and green hydrogen plants worldwide, is partly owned by the Saudi sovereign Public Investment Fund. According to the company, the share sale is part of its capital recycling strategy.

The Sirdarya facility is ACWA Power and Silk Road Fund’s first strategic partnership in Central Asia.  ACWA Power already has wind energy projects in Uzbekistan, while Silk Road Fund has invested in the country‘s culture, tourism, oil and gas sectors.

The signing coincided with Uzbekistan hosting the Shanghai Cooperation Organization Summit, held in the historic Silk Road city of Samarkand. In addition to geopolitical concerns, discussions during the summit also focused on boosting trade and investment among SCO members.

Chinese President Xi Jinping held bilateral talks with Uzbekistan President Shavkat Mirziyoyev.

The parties signed agreements worth a total US$15 billion on trade, investment, financial and technical cooperation. The parties noted the importance of further expanding trade and economic cooperation, including through the development of e-commerce, as well as the implementation of breakthrough industrial cooperation projects, primarily in automotive industry, green energy, agriculture and infrastructure development.

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