Saudi Arabia’s ACWA Power expands its energy portfolio in Uzbekistan

ACWA Power, a leading Saudi developer, investor, and operator of power generation, water desalination and green hydrogen plants worldwide, signed three major agreements with the government of the Republic of Uzbekistan. The first involves a Heads of Terms agreement for the development of a 1.5GW wind farm in Karakalpakstan; the second is an Investment Cooperation Agreement to jointly develop gas-to-power, renewable energy, and green hydrogen projects in Uzbekistan; and the third is related to charting a roadmap for the investment of green hydrogen in the Republic of Uzbekistan in collaboration with Air Products.

The agreements were signed on the occasion of the state visit of H.E. Shavkat Mirziyoyev, President, Republic of Uzbekistan to the Kingdom of Saudi Arabia, in the presence of His Excellency Eng. Khalid bin Abdulaziz Al-Falih, Minister of Investment of Saudi Arabia; His Excellency Jamshid Khojayev, Deputy Prime Minister and Minister of Investment and Foreign Trade of the Republic of Uzbekistan; Azim Akhmedkhojaev, First Deputy Minister of Energy of the Republic of Uzbekistan; and Shukhrat Vafaev, Deputy Minister of Investment and Foreign Trade; and Mohammad Abunayyan, Chairman of ACWA Power.

 The initiation of new projects is a part of the Uzbek government’s long-term strategy to diversify the country’s energy mix, which targets 8 GW and 12 GW of solar and wind capacity by 2026 and 2030, respectively.

“We are very pleased to further develop our cooperation with Saudi Arabia and with ACWA Power. ACWA Power is already implementing four energy projects in Uzbekistan, so these new ventures are based on a strong foundation of partnership and trust. This partnership will be a major contribution to Uzbekistan's achievements in developing and modernising the energy sector, and specifically our dedication to green energy. The joint projects will also give us access to the most modern technologies,” said Azim Akhmedkhojaev, First Deputy Minister of Energy of the Republic of Uzbekistan.

"Uzbekistan today is at the forefront of energy transition in central Asia. With the signing of these key agreementswith Uzbekistan’s Ministry of Investments & Foreign Trade and Ministry of Energy, Uzbekistan will become the second largest country for ACWA Power in terms of overall investment and we are proud to play a vital role in supporting the nation’s decarbonisation efforts, stemming from the strong international cooperation between Saudi Arabia and Uzbekistan under their visionary leadership”. Said Mohammad Abunayyan, Chairman of ACWA Power.

“On this great occasion, I express my deepest gratitude to H.E. Shavkat Mirziyoyev, President, Republic of Uzbekistan, and our partners in the Uzbek Ministry of Energy and the Ministry of Investment & Foreign Trade for their trust and commitment in achieving this important milestone. I would like to also thank H.R.H. Prince Abdulaziz Bin Salman Bin Abdulaziz Al Saud, Saudi Minister of Energy, for his tremendous guidance and support in enabling these truly fruitful partnerships. As we look together towards the future, we are confident of delivering our commitments with the highest global standards of quality and competitive costs and achieving positive impact on the economy and society through our firm focus on local talent development”, Abunayyan added.

The 1.5GW Karakalpakstan wind project, located in north-western Uzbekistan, would be one of the biggest single-site onshore wind projects in Central Asia and the world. The Heads of Terms agreement signed between ACWA Power and Uzbekistan’s Ministry of Energy and Ministry of Investment & Foreign Trade lays the foundation on which a power purchase agreement and investment agreement for the facility would be initiated. It was signed by Mohammad Abunayyan, chairman of ACWA Power, Shukhrat Vafaev, Deputy Minister of Investment and Foreign Trade, and Azim Akhmedkhadjaev, First Deputy Minister of Energy. 

Valued at c.US$2.4billion, the project is expected to achieve financial close by the end of 2023 and be fully commissioned by the first quarter of 2026. When complete, the facility is expected to power 1.65 million households and offset 2,4 million tonnes of carbon emissions per year. 

The company also signed an Investment Cooperation Agreement (ICA) with the same ministries, whereby all parties will collaborate to develop projects in gas-to-power, wind, hydroelectric and green hydrogen projects valued at US$10billion over a five-year period, starting 2023. Signatories to the ICA were Mohammad Abunayyan, Shukhrat Vafaev, and Azim Akhmedkhadjaev.

Acknowledging the importance of green hydrogen generation to the vision of His Excellency President Shavkat Mirziyoyev, ACWA Power and Air Products along with the Uzbek Ministry of Energy are charting a roadmap to the investment efforts in this field. This agreement is the second phase of the previous MoU signed during the visit of the Saudi Arabian delegation to the Republic of Uzbekistan in January 2021. Mohammad Abunayyan, chairman of ACWA Power, Azim Akhmedkhadjaev, First Deputy Minister of Energy of the Republic of Uzbekistan, and Dr. Peter Hortig from Air Products, attended the signing ceremony.

“As the world’s leading supplier of hydrogen and clean energy megaprojects, we are honored to continue our collaboration with ACWA Power and the Republic of Uzbekistan, exploring clean energy solutions that support Uzbekistan’s drive for decarbonization and energy security for its people,” said Seifi Ghasemi, Air Products’ Chairman, President and Chief Executive Officer.

The development, construction, and operation of one of the largest wind farms in the Central Asian region and the world by a Saudi company along with the joint exploration of opportunities to further develop clean energy sources reflects the Kingdom’s leadership in the field of energy and its capability to develop the human and technical potential for Saudi companies, especially in the renewables sphere.

The 1.5GW Karakalpakstan wind project is ACWA Power’s fifth project in Uzbekistan. The company’s Uzbek portfolio also includes three wind farms, and a combined cycle gas turbine project. With the signing of the current key agreements, Uzbekistan will become the second largest country for ACWA Power in terms of overall investment.

ACWA Power remains focused on extending its leadership in high-growth markets through operational excellence and technological expertise, delivering power and desalinated water to communities in thirteen countries worldwide.