Bankers expect growing activity in the secondary market for infrastructure assets in Central Asia and the Middle East, after China Southern Power Grid recently acquired stakes in two wind projects in Uzbekistan.
Saudi-listed Acwa Power sold 35% of its shareholdings in Acwa Power Bash Wind Project Holding Company and Acwa Power Uzbekistan Wind Project Holding Company to China Southern Power Grid International (HK) Co Ltd (CSGIHK), the global investment and development arm of China Southern Power Grid.
The Saudi-listed energy company is recycling capital via long-term strategic partnerships rather than just undertaking opportunistic one-off sales. The company has started due diligence on up to eight projects in China as part of a new growth strategy for this year with new and more ambitious targets.
In December 2022, framework agreements were signed between Acwa Power and Chinese companies, laying the ground for financing, investment, and construction of Acwa Power’s global clean and renewable energy projects in Saudi Arabia and Belt and Road Initiative countries.
Tang Yifeng, vice-president of China Southern Power Grid, says: "By leveraging synergies, we can strengthen our strategic partnership and work towards developing a series of benchmark projects and contribute to the implementation of the Uzbekistan 2030 Strategy.”
Huge generation capacity
The Bash and Dzhankeldy wind power plants are set to become some of Central Asia’s largest renewable energy projects, with a joint generation capacity of one gigawatt. The total cost of the two projects is US$1.3 billion. The sole offtaker is state-owned JSC National Electrical Grid of Uzbekistan, under a 25-year power purchase agreement.
At the end of 2022, the European Bank for Reconstruction and Development (EBRD) arranged two syndicated loans totalling US$520 million to support the construction of the two projects.
The US$277 million Bash Wind loan consisted of an A loan of US$150 million on the EBRD’s own account and a B loan of US$127 million syndicated to commercial lenders.
The US$243 million Dzhankeldy project will consist of an A loan of US$150 million on the EBRD’s account, with the remaining US$93 million syndicated to commercial banks.
Co-financing was provided by German development finance institution DEG, French Development Agency‘s Proparco, Standard Chartered Bank, and other banks.
In April 2023, the Asian Development Bank signed a US$40.5 million loan for the 500-megawatt Bash project and US$46.5 million for the 500MW Dzhankeldy project. The bank is also administering US$40.5 million for Bash and US$46.5 million for Dzhankeldy from the Leading Asia's Private Infrastructure Fund.
