new delivering long-term value - acwa power · 2020. 7. 24. · and great results. acwa power is a...

ACWA Power

Annual Report 2018

DELIVERING LONG-TERM VALUE

1ACWA PowerAnnual Report 2018

King Salman

bin Abdulaziz Al-Saud

The Custodian of the

Two Holy Mosques

Prince Mohammed bin Salman

bin Abdulaziz Al-Saud

Crown Prince, Vice President

of the Council of Ministers

and Minister of Defense

2 ACWA PowerAnnual Report 2018

OUR MISSION:

Reliably delivering electricity and desalinated water at low cost.

OUR VISION:

To ensure the ingenuity and entrepreneurship of the private sector and make available

electricity and desalinated water in a reliable manner to support social development and

economic growth of nations.

OUR VALUES:

SAFETY

We put safety first! We are

committed to protecting the

well-being of our employees,

partners, plants and the

communities in which we

operate. We find sustainable

solutions for our business

to protect the environment

for generations to come.

PEOPLE

We treat our employees and

partners with respect and

professionalism, fostering

a working environment

where people can contribute,

innovate and excel. We work

together in collaborative and

inclusive teams, showing

support for each other to

achieve client, personal and

Company goals. We embrace

integrity and transparency

by practicing the highest

professional and ethical

standards towards our

clients, communities

and one another.

PERFORMANCE

We are committed to

excellence in our business

and operations. We set and

achieve ambitious goals by

constantly raising the bar of

our performance. We hold

ourselves accountable for

taking ownership to achieve

superior results. We are

bold, passionately taking

on challenges with speed

and agility, quickly adapting

to our environment in the

relentless pursuit of growth

and great results.

ACWA POWER IS A LEADING DEVELOPER, OWNER

AND OPERATOR OF POWER GENERATION AND

WATER DESALINATION PLANTS.

WE PROVIDE POWER AND WATER FOR COMMUNITIES

ACROSS THE MIDDLE EAST AND NORTH AFRICA,

SOUTHERN AFRICA, EUROPE AND SOUTHEAST ASIA,

WITH A FOCUS ON DELIVERING SUSTAINABLE,

LONG-TERM VALUE TO OUR STAKEHOLDERS.

SINCE THE COMPANY’S FOUNDING IN 2004,

OUR PORTFOLIO HAS GROWN TO INCLUDE

50 ASSETS IN 11 COUNTRIES.

WH

O W

E A

RE


CO

NTEN

TS

STRATEGIC REPORT

At a Glance 4

What We Do 6

Where We Operate 8

Chairman’s Statement 10

Leadership Statement 12

Market Overview 14

Business Model 16

Strategy 17

Our Assets 18

Strategy in Action 20

Operational Review 26

DIRECTORS’ REPORT

Chairman’s Introduction to Governance 28

Board of Directors 30

Directors’ Report 32

References 40

Glossary IBC


1,980,385

1,432,620

1,173,082

2018

2017

2016

36,248,902

32,661,185

25,054,079

2018

2017

2016

1,369,471

1,882,830

1,059,202

2018

2017

2016

HIG

HLI

GH

TS Operating Income (Before impairment

and other expenses) (‘000 SAR)

1,980,385

Total Assets (‘000 SAR)

36,248,902

Cash Flows from Projects (‘000 SAR)

1,369,471

AT A GLANCE

ACWA POWER USES FINANCIAL AND OPERATIONAL

KEY PERFORMANCE INDICATORS (KPIs) TO TRACK

PROGRESS AGAINST DELIVERY OF OUR STRATEGY.

2018 KPIs ILLUSTRATE A YEAR OF OPERATIONAL

GROWTH AND CONTINUING FINANCIAL STRENGTH

FOR THE GROUP.

FINANCIAL HIGHLIGHTS


STRATEGIC REPORT DIRECTORS’ REPORT

50

46

31

2018

2017

2016

22.9%

22.7%

15%

2018

2017

2016

Power

29.3 GWWater

3.9M m3/day

Total Number of Assets

50

Renewable Energy Portfolio by Project Cost

22.9%

2018 GROSS CAPACITY

OPERATIONAL HIGHLIGHTS*

* Figures include advanced development assets.


THROUGH RESPONSIBLE

OPERATION AND OWNERSHIP,

WE DELIVER RELIABLE, SAFE,

EFFICIENT AND COMPETITIVELY

PRICED POWER AND

DESALINATED WATER TO

GROWING ECONOMIES.

Technology-neutral and fuel-agnostic,

we serve client nations and communities

according to their needs – through

natural gas, oil-fired, coal, wind, PV

and concentrated solar power electricity

generation – while working to minimise our

impact on the environment. We continue

to grow our renewable assets in a lower-

oil-price environment, as offtakers look

to increase energy security through

diversification, shareholders expect

healthy returns and the global energy

community seeks to reduce emissions.

PO

WER

� READ MORE OPERATIONAL REVIEW PAGE 26

102,587GWhPower delivered in 2018

50 AssetsAcross three continents

164.2 Bn SARCombined gross investment value

WHAT WE DO


STRATEGIC REPORT DIRECTORS’ REPORT WATER

� READ MORE OPERATIONAL REVIEW PAGE 26

742,287,103 m3

Water delivered in 2018

We provide a crucial supply of desalinated

water in our home market of Saudi Arabia

and other growing economies where water

is scarce, removing salt from seawater

to produce drinking water, primarily through

a process of reverse-osmosis. The innovative

technology we deploy is driving the future of

desalination, moving it toward more efficient,

sustainable production – particularly as we

continue to leverage renewable power in

our desalination plants.


Saudi Arabia

50Assets

11Countries

3,500+Employees

PROJECT TYPE

Conventional

Renewable

Our offices

We operate in our home market of Saudi Arabia and

across diverse geographies in the Middle East, North

Africa, Southern Africa, Turkey and Bulgaria, and

Southeast Asia. We develop, own and operate projects

where electricity demand is increasing, potable water

is sorely needed and utility scale renewable projects

are being integrated into the grid.

WHERE WE OPERATE

OUR GLOBAL

MARKET PRESENCE

SAUDI ARABIA

• Saudi Arabia is home to ACWA Power’s

Marafiq IWPP, which remains the world’s

largest power generation and water

desalination combined plant in the world

• In 2018, construction began on Sakaka PV IPP,

the first utility-scale solar plant in ACWA

Power’s home market

• 2,220 MW of generation capacity was

added in 2018 for a total of 12,205 MW

of operational capacity

HOME MARKET



Jordan

Oman

UAE

Egypt

Morocco

Bulgaria

Turkey

South Africa

Vietnam

JORDAN

• ACWA Power operates both conventional

and renewable energy plants in Jordan

• In 2018, ACWA Power’s operational capacity

in the country increased by 485 MW

OMAN

• In 2018, ACWA Power generated

4,206,307 MWh and 32,839,858 m3

of water in Oman

• 445 MW of generation capacity was

added in Oman in 2018

EGYPT

• ACWA Power was the lowest bidder

for a 200 MW project in Egypt in 2018

• The expected total power capacity

in the pipeline in Egypt is 2,620 MW

SOUTH AFRICA

• ACWA Power’s current operation in the

country, Bokpoort CSP IPP, is among the

most efficient CSP plants in the world

• Two other projects were under Advanced

Development in South Africa in 2018,

totaling 406 MW of power capacity

TURKEY

• As the market changed in 2018,

ACWA Power reduced its stake in

Turkey’s operations

• In 2018, 3,570,585 MWh of electricity

was generated in Turkey

VIETNAM

• ACWA Power’s capacity in Vietnam

is expected to reach 1,241 MW with

the coal-fired 1,200 MW Nam Dinh

project in Advanced Development,

and Vin Hao – a potential 41 MW PV

acquisition opportunity

UNITED ARAB EMIRATES

• ACWA Power won one bid in the UAE in 2018 for

205,000 m3/day of desalinated water (UAQ IWP)

• Construction also began for 950 MW NOOR Energy

1 IPP, which represents one of ACWA Power’s largest

financial investments in a project

BAHRAIN

• Now in Advanced Development, ACWA Power’s first

asset in Bahrain, Al Dur Phase II IWPP, will have capacity

of 227,000 m3/day of water and 1,500 MW of power

INTERNATIONAL

MOROCCO

• In 2018, 100 percent of the power

generated by ACWA Power in Morocco

came from renewable sources,

including wind and CSP projects

• ACWA Power’s NOORo II IPP CSP

site came online in 2018 as part of the

largest CSP operation in the world

BULGARIA

• ACWA Power’s power production in

Bulgaria is entirely solar PV operations

• 80,775 MWh of electricity was generated

in 2018


GENERATING LONG-TERM

VALUE AND IMPACT FOR

AND ACROSS GENERATIONS

offer opportunities to create far-reaching

and long-term value for our stakeholders.

In 2018, we signed a Head of Terms with

Saudi Aramco for the circa 43 billion SAR Jazan

Economic City IGCC Gasification/Power plant.

In addition, we began construction on Sakaka

PV IPP, the first utility-scale renewable energy

project under The Renewable Energy

Programme of Saudi Arabia. Scheduled to

come online in 2019, this landmark solar PV

project will provide reliable renewable power

at low cost and will contribute to a more

diverse and economical national energy mix.

With customer demand for desalinated water

on the rise, particularly in Saudi Arabia and the

United Arab Emirates, we are leveraging our

innovations in reverse-osmosis technology

to establish sector leadership and increase

the prospects of making affordable potable

water available to an increasingly thirsty

world. Our greatest water investment to date

in the Kingdom, Rabigh 3 IWP, was won in

2018. This project will provide 600,000 m3

of desalinated water daily, servicing the water

demand for Mekkah and Jeddah year-round.

In addition to winning these two preeminent

projects in Saudi Arabia, two of our power

assets in the Kingdom, namely Rabigh 2 IPP

and Petro-Rabigh (Phase 2) IWSPP, became

fully operational. The two assets will

contribute additional reliable capacity

of 2,220 MW of power for Saudi Arabia

over the next 25 years.

Since ACWA Power’s founding 14 years

ago in our home market of Saudi Arabia,

we have continuously delivered on our

mission to reliably provide electricity and

desalinated water at low cost. As a leading

global provider of power and water, with

32 operational projects in 2018, which

mostly have a lifespan of 25 to 35 years,

we recognise that our actions create

impact for and across generations.

In alignment with the Saudi Vision 2030

goals and objectives, and reinforced by our

strategic commitment to be number one

in generating electricity and producing

desalinated water in our home market,

our recent investments in Saudi Arabia

DEL

IVER

ING

V

ALU

E

CHAIRMAN’S STATEMENT

ACWA Power experienced a record year for operational growth

in 2018, bringing nine plants online and more than doubling

our operating hours. These successes are attributed to the

Group’s forward-looking business strategy, which aims to

create long-term value for our shareholders and communities

in our home market and abroad.



In the course of 2018, through our

investments at home and internationally,

we have reinforced our solid foundation for

long-term, sustainable growth and value

creation. We not only won five new projects

in our home market and stronghold markets

– our international markets with multiple

assets – but continued to accelerate project

completion rates; our dynamic and agile

team delivered a record-breaking operational

year with nine plants coming online across

Morocco, Oman, Jordan and Saudi Arabia,

and overall operating hours doubling.

All the while, safety remained our number

one priority. Our lost-time incident (LTI) rate

remained below that which is defined by

international standards despite the additional

expected challenges as a result of the

increase in operations and operating hours.

Having said that, it is with great sorrow, that

we acknowledge the loss of Mr. Bi, Mr. Hu

and Mr. Amit Kumar due to accidents on site.

Though they were not directly employed by

us, they certainly were considered members

of the ACWA Power family, and will firmly

remain in our memory.

In our continuous search for excellence

in delivering on our commitment to safety,

our people and our performance, we

implemented new leading-practice internal

standards and systems, and launched a new

Human Capital strategy, including leadership

development and educational programmes.

On the HSSE side, we instituted new health,

safety, security and environment policies

and key performance indicators across

our global operations to better measure

and manage our performance. We also

remain committed, along with our O&M

arm, NOMAC, to sharing HSSE standards,

performance and reliability best-practices

developed in our world-class facilities.

In 2018, we continued to leverage the

benefits of our distinct business model to

deliver long-term value for our customers

and shareholders. Our build-own-operate

model enables us to – A) maintain control

and manage efficiencies over the life cycle

of our assets; B) deliver stable returns for

the 20 to 35 years for each asset; and C)

offer sustainable tariffs that provide cost

competitive pricing for our customers as

well as long-term shareholder returns. As

a testament to our sovereign shareholder’s

strong confidence in us and our business

model, total PIF investments grew to

represent 24.98 percent direct equity

interest in 2018.

We anchor our capable, forward-looking

approach to doing business in a robust risk

management and mitigation strategy. We

strive to minimise risk through portfolio

diversification and leading corporate

governance. Our portfolio diversification

takes multiple forms, including developing

stronghold positions in targeted countries,

contracting with multiple off-takers, employing

a range of technologies to best capture

opportunities, remaining fuel-agnostic

to best meet the needs of our clients,

and cultivating a diverse pool of suppliers.

Through our governance mechanisms, our

management and Board guide and uphold

our corporate values in delivering sustainable

value for our stakeholders with transparency,

integrity and the highest ethical standards.

Our focus on long-term value creation and

impact for and across generations begets

benefits for a wide circle of our stakeholders.

By delivering reliable, affordable power and

water across 11 countries, we provide the

basis for socio-economic well-being in

communities on three continents. Our new

technologies and innovative financing models

have yielded new plant efficiencies, driven the

cost competitiveness of renewables – to the

point of outcompeting fossil fuel – and

strengthened our ability to deliver reliability,

affordability, and long-term returns.

We continued to grow our investments

in the local communities, and in 2018, we

deployed a total of 13 million SAR into various

CSR programmes in our operating countries.

Ranging from cost-saving tariffs and local job

creation, to health, well-being and technical

training initiatives tailored to local livelihood,

these programs have become essential

elements for generating lasting economic

value in these communities. We will continue

to strengthen our investments in these

communities to deliver best-in-class service

and create long-lasting value for all our

stakeholders.

The achievements of 2018 are reflective of

the invaluable contributions of our Board

members and management team, and,

in particular, the dedication and efforts of

our global family of employees. I would like

to thank each of them for bringing ACWA

Power to new levels of excellence and

innovation. We also thank our shareholders,

customers, host governments and their

people we bring our services to, and our

suppliers and financial partners, whose

trust in our abilities and valued relationships

are irreplaceable.

I look forward to our continued collaboration

on growth and long-term value creation

in 2019.

Mohammad A. Abunayyan

Chairman

HIGHLIGHTS

• Nine plants came online – more than any other single year

• Won Rabigh 3 IWP in KSA, which will service the water demand

for Mekkah and Jeddah year-round

• PIF shareholding represents nearly 25 percent equity interest

13 Mn SARspent on CSR programmes

in 2018


GENERATING LONG-TERM VALUE

AND DEMONSTRATING ROBUST

OPERATIONAL PERFORMANCE

2018 has been a significant year for long-

term value creation at ACWA Power. We met

or surpassed our expectations in a range

of strategic areas, including considerable

investment in our home market and further

growth in our stronghold markets, through

new business development and a number of

projects coming online. As part of a targeted

business stabilisation effort, we successfully

restructured the only merchant asset in our

portfolio and isolated our business from the

underlying economic and currency volatility

prevailing in the market.

We are pleased with the scale of projects we

won in 2018. We added 2.0 GW to our now

29.3 GW gross power portfolio, within which

our operational or online capacity grew by

28 percent to 16.9 GW. Portfolio growth in

water has been no less significant; we added

1.1 million m3/day from new water projects,

growing our portfolio by 36 percent over last

year, reaching 3.9 million m3/day production

capacity. Notably, in our home market, we not

only signed a 43 billion SAR Head of Terms

with Saudi Aramco to participate in the Jazan

Economic City gasification development as a

partner and operator of the associated power

plant, but also won the opportunity to develop

the largest independent water-desalination

plant, Rabigh 3 IWP.

Operationally, we brought nine plants online

in multiple markets – more than double that

of any single previous year – and greatly

increased the economic impact we generate

in these regions. In Morocco, NOORo II

CSP IPP and Khalladi Wind IPP entered into

operations in April and July, respectively,

and in October we brought NOORo III CSP

IPP and NOOR PV1 IPP online; in Oman and

STR

ATEG

ICG

RO

WTH

LEADERSHIP STATEMENT

With firm commitments from governments of growing

markets to expand their power generation and water

production capacity, we masterfully blended our business

model that focuses on minimising costs with our ingenuity

and entrepreneurship to deliver another year of positive

operational growth and lasting community impact.



Jordan, two natural gas and one PV plant

moved to operations – Salalah 2 IPP, Zarqa IPP,

and Mafraq PV IPP; and in our home market of

Saudi Arabia, we completed Rabigh 2 IPP and

Petro Rabigh (Phase 2) IWSPP, natural gas and

heavy fuel oil plants, respectively.

ACWA Power’s investments continue to be

fuel-agnostic and technology-neutral. We

provide energy sources that best fit the needs

of the economies we serve in order to deliver

optimal support to our customers for their

continued growth. Yet within our portfolio,

we recognise the growing demand for

renewables and water desalination, and

continue to employ innovative and leading-

practice technologies in the areas of solar,

wind, water and other carbon-neutral sources.

In 2018, our renewable portfolio grew by 2.7

billion SAR to reach 37.6 billion SAR, including

2.1 billion SAR in under construction projects

in Egypt, Jordan and Saudi Arabia, and

19.2 billion SAR in advanced development

projects in South Africa and the UAE. We also

demonstrated our commitment to growing

our water portfolio through adding new water

desalination assets in the UAE, Saudi Arabia

and Bahrain at an aggregate project cost of

4.5 billion SAR.

In sum, we see an abundance of opportunity,

both in our home market and abroad. In

Saudi Arabia, we are well positioned to lead in

rapidly-growing renewables and desalination

markets, where, spurred by Vision 2030, Saudi

Arabia is expected to invest 5.7 billion SAR in

renewable energy over the next 10 years 1,

and add another 300 billion SAR investment

in desalination by 2025 2. In our stronghold

markets, investment in renewables is also

projected to rise; from Morocco to Oman and

Egypt to the UAE, respective governments

have all announced challenging investment

and energy-mix targets for 2030 and beyond.

Our strategic, forward-looking investments

and finance models are aligned with our core

business strengths as well as long-term market

opportunities. For instance, PIF now has a

direct 24.98 percent equity interest in ACWA

Power. In addition, our maiden corporate

bond, the 814 million USD (3.1 billion SAR)

144a-Reg S Bond (ACWA 39), is holding its

trading ground with yield-to-maturity well

above the market, reflecting investors’ strong

confidence in the underlying portfolio’s robust

performance and strong cash flow coverage

of the debt servicing obligation.

While providing long-term returns for investors

throughout the life of their investment, our

business model also translates into wider

economic benefits for both the countries

and the communities in which we operate.

Wherever we invest, we set a remarkable

minimum quota of 40 percent local

employment in all our project sites, which

provides jobs and technical training for local

communities for approximately 25 to 30 years

per asset. In addition, our low tariffs deliver

significant cost savings for countries for the

duration of our operations that ultimately

benefit the local communities.

As our operating plants supply reliable power

and water to tens of millions of people around

the world, we provide the basic commodities

needed for communities to thrive. In 2018,

we delivered 102,587 GWh of electricity and

742,287,103 m3 of desalinated water across

nine countries.

To ensure sustained value creation for all

our stakeholders, we will continue to balance

integration of new opportunities with our

current successful operations. We thank

our Board of Directors for your wise counsel

and tireless support; our employees for your

incalculable contributions to excellence;

and our shareholders, customers, host

governments and suppliers for your invaluable

partnerships and patronage. Together, we

reached new levels of collaboration and

performance in 2018. We look forward to

seizing the opportunities of 2019 with you.

Paddy Padmanathan

President & CEO

Thamer Al Sharhan

Managing Director

For references see page 40.

HIGHLIGHTS

• Delivered 102,587 GWh of electricity

• Produced 742,287,103 m3 of desalinated water

• Renewable portfolio growth of 2.7 billion SAR

Power

7.5%(Grew from 27.3 GW to 29.3 GW)

Water

36%(Grew from 2.8M m3/day to 3.9M m3/day)


MARKET OVERVIEW

ADDRESSING THE GROWING DEMAND

FOR POWER AND WATER IN OUR

STRONGHOLD REGIONS

ACWA Power’s strategic investments in its current operating

regions – the Middle East, North Africa, Southern Africa,

Southeast Asia and Europe – address the growing demand

for reliable power and desalinated water in countries with

increasing populations, evolving infrastructure and rising GDP.

THE MIDDLE EAST

As one of the most water-stressed regions

in the world, the Middle East is faced with the

challenge of maintaining a consistent supply

of fresh water 1. Additionally, with electricity

demand across the region expected to triple

by 2050, provision of reliable power will

continue to present both challenges and

market opportunities 2,3.

By 2040, energy generation demand

is expected to reach 888 TWh in the

Middle East 4.

ACWA Power’s home market of Saudi Arabia

continues to present new opportunities,

as the country prioritises the privatisation

of energy assets and has set a goal to

generate 60 GW of renewable energy as

part of its Vision 2030 5. As the largest water

desalination market in the world, Saudi

Arabia is also expected to invest another

300 Bn SAR in desalination projects by 2025 6.

The opportunities in Saudi Arabia are

mirrored in ACWA Power’s other stronghold

markets in the Middle East, including Oman,

the UAE and Jordan. Further renewable

energy deployment across the region

has been predicted at 100 GW by 2035 7.

NORTH AFRICA

In 2018, ACWA Power solidified its position

in Morocco, making Morocco a stronghold

market for ACWA Power in renewable power

generation.

Morocco has set a national objective to

increase the share of renewables in its

generating capacity to 42 percent by 2020

and to 52 percent by 2030 8,9.

Total electricity demand in North Africa is

projected to increase to 980 TWh by 2030 10.

OU

R

MA

RK

E T

S



SOUTHEAST ASIA

A 70 percent increase in installed power

generation capacity is required to meet

Southeast Asia’s growing energy demand,

which is projected to reach 1,997 TWh

by 2040 13,14.

In Vietnam, where ACWA Power’s Nam

Dinh IPP is in advanced development, the

rising demand for energy requires that the

electricity sector grow at rates of between

10.3 percent and 11.3 percent before 2020

and between 8 percent and 8.5 percent

between the years of 2021-2030 15.

EUROPE

In recent years, Turkey has liberalised its

electricity markets in order to attract private

investments. ACWA Power held 1.09 percent

of the nation’s 87 GW capacity 16,17.

In alignment with the European Union’s

targets for diversified, renewable energy,

Bulgaria has set a goal to source at least

20 percent of its energy from renewable

sources by 2020 and at least 27 percent

by 2030 18.


SOUTHERN AFRICA

Due to population growth and industrial

development, South Africa’s demand for

desalinated water is projected to grow

by 32 percent by 2030 and electricity

demand is expected to increase to

570 TWh by 2030 11,12.

ACWA Power is considering future

investments to provide water and power

in the fast-growing markets of Botswana

and Namibia.


BUSINESS MODEL

CREATING MARKET-LEADING

VALUE THROUGH COMPREHENSIVE

ASSET MANAGEMENT

By exercising control over our projects from start to finish,

we are able to manage partnerships, efficiencies, costs and

long-term return on investment.

We establish this control by being both owner and operator of

our global assets, a rare combination within the IPP/IWP model.

We also manage our stake throughout a project’s life cycle to

generate stable, long-term returns and ensure service quality

and reliability.

DEVELOPS POWER AND WATER

DESALINATION PROJECTS

OWNS AND OPERATES THOSE

SAME PROJECTS FOR THE

LONG TERM

PROTECT OUR

INVESTMENTS

MANAGE THE

OPERATIONS

OF OUR ASSETS

GENERATE STABLE,

LONG-TERM RETURNS

We have developed economies of scale to manage costs throughout our value chain. We also structure financing to drive down all costs.

Our work volume balances the market-leading savings we pass on to client nations and their utility customers, benefitting all stakeholders.

ACWA POWER

THIS COMBINATION ENABLES US TO:

A WINNING MODEL

ACWA POWER’S 2018 WIN RATE: 63%*

* This figure is reflective of bids submitted in 2018 which were awarded to us or in which we were lowest bidder.


STRATEGIC REPORT DIRECTORS’ REPORT STRATEGY

EXTENDING

VALUE CREATION

STRATEGIC PILLAR #1

#1 IN OUR HOME MARKET

Be the largest private IWPP player in our

home market of Saudi Arabia and the

“go-to” partner for all government

electricity and water projects by

participating in all bids and remaining

open for expansions and extensions

whenever possible.

� READ MORE PAGE 20

STRATEGIC PILLAR #2

DEVELOP STRONGHOLD

COUNTRIESIdentify and develop stronghold countries,

where we can grow to be a significant

local player with multiple assets,

strong presence and sustainable

long-term relationships.


STRATEGIC PILLAR #3

MULTI-TECHNOLOGY AND OWN OPERATOR

Create a stable risk-versus-return balance

by remaining technology agnostic,

adopting and leveraging new technologies

and suppliers, and maintaining a majority

share of operations to ensure maximum

control and learning.


OUR GOAL IS TO BECOME ONE OF THE LARGEST IWPP PLAYERS

IN THE MIDDLE EAST, ASIA AND AFRICA REGIONS, CREATING

SUSTAINABLE VALUE FOR ALL OUR STAKEHOLDERS.

OUR STRATEGY IS UNDERPINNED BY OUR FOUNDING PRINCIPLES

An overall balanced asset portfolio

Strict adherence to our socially responsible business model

The financial strength and flexibility to fund high growth

Designed to produce significant growth, increased market share,

service quality and stakeholder value, our business strategy led

to positive trends across key indicators, positioning the Company

for sustained long-term value creation.

OUR BUSINESS STRATEGY


Project name Project cost

(Mn SAR)

ACWA Power effective share

(%)

Contracted power (MW)/water

(000’ m3/day)PCOD

(actual/expected)Contract duration

(years) Project type

Saudi Arabia

Shuaibah IWPP 9,188 30.00 990/880 Q1 2010 20

Shuaibah Expansion IWP 874 30.00 0/150 Q4 2009 20

Petro-Rabigh IWSPP** 4,466 74.00 360/134 Q2 2008 25

Bowarege IWP 371 64.85 0/50 Q3 2008 N/A

Marafiq IWPP 12,596 20.00 2,744/800 Q4 2010 20

Shuqaiq IWPP 6,866 32.00 850/212 Q2 2011 20

Rabigh IPP 9,398 40.00 1,204/0 Q2 2013 20

Qurayyah IPP 10,189 17.50 3,927/0 Q1 2015 20

Rabigh 2 IPP 5,847 50.00 2,060/0 Q1 2018 20

Petro-Rabigh (Phase 2) IWSPP 3,689 74.00 160/54 Q1 2018 25

Shuaibah Expansion II IWP* 1,176 100.00 0/250 Q2 2019 25

Sakaka PV IPP* 1,133 69.99 300/0 Q2 2020 35

TOTAL 65,792 12,505/2,530

The United Arab Emirates

Shuaa Energy PV IPP 1,222 49.00 200/0 Q1 2017 25

Hassyan IPP* 12,140 26.95 2,400/0 Q1 2023 25

TOTAL 13,362 2,600/0

Oman

Barka 1 IWPP 1,556 41.91 427/91Operational when acquired,

acquisition Q3 201018.7

Barka 1 Expansion IWP 204 41.91 0/45 Q2 2014 8.2

Barka 1 Phase II Expansion IWP 298 41.91 0/57 Q1 2016 6

Salalah 2 IPP – Existing 629 27.00 273/0Operational when acquired,

acquisition Q2 201515

Salalah 2 IPP – Greenfield 1,687 27.00 445/0 Q1 2018 15

Ibri IPP* 3,626 44.90 1,509/0 Q2 2019 15

Sohar 3 IPP* 3,589 44.90 1,710/0 Q1 2019 15

Salalah IWP* 600 50.10 0/114 Q4 2020 20

TOTAL 12,189 4,365/307

South Africa

Bokpoort CSP IPP 1,939 40.00 50/0 Q1 2016 20

Jordan

CEGCO Assets 3,885 40.93 962/0Operational when acquired,


Zarqa IPP 1,819 60.00 485/0 Q3 2018 25

Mafraq PV IPP 265 100.00 50/0 Q4 2018 20

Risha PV IPP* 254 100.00 50/0 Q3 2019 20

TOTAL 6,223 1,547/0

Morocco

NOORo I CSP IPP 3,153 73.13 160/0 Q1 2016 25

Khalladi Wind IPP 655 75.00 120/0 Q2 2018 20

NOORo II CSP IPP 4,125 75.00 200/0 Q2 2018 25

NOORo III CSP IPP 3,233 75.00 150/0 Q4 2018 25

NOOR Ouarzazate IV PV1 IPP 293 75.00 55/0 Q3 2018 20

NOOR Laayoune PV1 IPP 379 75.00 65/0 Q3 2018 20

NOOR Boujdour PV1 IPP 116 75.00 15/0 Q3 2018 20

TOTAL*** 11,953 765/0

Bulgaria

Karadzhalovo PV IPP 1,020 42.00 50/0Operational when acquired,


Egypt

Ben Ban 1* 281 64.34 50/0 Q2 2019 25

Alcom Energy (Ben Ban 2)* 300 64.34 50/0 Q2 2019 25

TK for Solar (Ben Ban 3)* 113 35.39 20/0 Q2 2019 25

TOTAL 694 120/0

Turkey

Kirikkale CCGT IPP 3,488 69.60 950/0 Q3 2017 Merchant market

TOTAL 16,660 22,952/2,838

PROJECT TYPE

Conventional

Renewable

* Asset under construction.

** The legal formalities related to the change in Petro Rabigh IWSPP shareholding

were completed in Q1 2019.

*** Project costs may not equal total due to rounding.

Salalah 2 IPP-Greenfield and Salalah 2 IPP-Existing are considered one asset.

CEGCO includes five assets of which two are renewable (wind) assets.

OUR ASSETS



Projects under advanced development

Project name Project cost

(Mn SAR)

ACWA Power effective share

(%)

Contracted power (MW)/water

(000’ m3/day)Project

type

Redstone CSP IPP, South Africa 2,959 35.00 100/0

Khanyisa IPP, South Africa 3,866 40.00 306/0

Nam Dinh 1 IPP, Vietnam 8,250 45.00 1,200/0

Dairut IPP, Egypt 8,250 40.00 2,300/0

NOOR Energy 1 IPP, UAE 16,211 24.99 950/0

UAQ IWP, UAE 1,058 65.00 0/205

Al Dur Phase II IWPP, Bahrain 4,125 60.00 1,500/227

Rabigh 3 IWP, Saudi Arabia 2,813 70.00 0/600

TOTAL 47,531 6,356/1,032

15% Oil63% Natural Gas

13% Coal

4% PV5% CSP

Fuel source by project MW

0.4% Wind


Aligned with the objectives of Vision 2030

and the Saudi National Renewable Energy

Programme, ACWA Power is building the

first utility-scale solar plant in the Kingdom

of Saudi Arabia – Sakaka PV.

This unprecedented endeavour has created

900 jobs in the Kingdom and will contribute

over 450 Mn SAR to the country’s GDP 1.

The Sakaka PV project will also build

capacity for the future of renewables within

the country, and the project’s world-record-

breaking tariff is set to transform the

photovoltaic (PV) solar energy sector

across the globe, making renewable solar

power more accessible and affordable.

ACWA Power holds a 69.99 percent

controlling stake in the newly established

Sakaka Solar Energy Company (SSEC).

SSEC has signed a 25-year Power Purchase

Agreement with ACWA Power.

SAKAKA PV WILL PROVIDE:

• 300 MW of renewable energy 2

• Power for more than 45,000 households

in the Kingdom 3

• More than 430,000 tonnes of carbon

dioxide offsets/year 4


#1 IN OUR HOME MARKET

As the largest IWPP player in the Kingdom, ACWA Power

is dedicated to meeting Saudi Arabia’s water and electricity

demand, and to advancing the adoption of renewable energy

in support of Vision 2030. In 2018, ACWA Power invested in

the growth and diversification of the Saudi Arabian economy

by contributing over 65 Bn SAR to the GDP, with its portfolio

of 12,505 MW of power and 2,530,000 m3/day of water

capacity in the Kingdom.

A LANDMARK SOLAR INVESTMENT

IN SAUDI ARABIA: SAKAKA PV IPP

300 MWpower to be generated by Sakaka PV

45,000homes will be powered

STRATEGY IN ACTION


STRATEGIC REPORT DIRECTORS’ REPORT STRATEG

Y

IN A

CTIO

N


STR

ATEG

Y

IN A

CTI

ON

STRATEGY IN ACTION CONTINUED



In 2018, with Noor Energy 1 IPP (formerly

known as Dewa CSP IPP) now in advanced

development, Dubai has become a new

stronghold market for ACWA Power.

Reflective of trends in other stronghold

countries, population and electricity demand

are growing in the United Arab Emirates,

which presents an opportunity for ACWA

Power to become a significant local player

with multiple assets in the country.

• Annual population growth rate: 1.4 percent 1

• Annual electricity demand growth rate: 5

to 6 percent 2

As a long-term investor, ACWA Power took

steps in 2018 to build sustainable relationships

in the Dubai community by creating a multitude

of jobs at its newest asset, NOOR Energy 1 IPP.

ACWA Power’s investment of 16,211 Mn SAR

is its single-largest investment in any project

– a testament to the Company’s confidence

in concentrated solar power (CSP) technology

and its commitment to helping the UAE reach

its renewable energy goals and growing

electricity demand.

#2 DEVELOP STRONGHOLD COUNTRIES

ACWA Power maintains a balanced portfolio by developing

diversified stronghold markets and building sustainable long-

term relationships within the communities in which it operates.

ACWA Power’s current investments in its stronghold markets

of Morocco, Oman, Jordan, Egypt and the UAE total 27 assets.

MEETING GROWING DEMAND IN ACWA

POWER’S NEWEST STRONGHOLD

MARKET: DUBAI, THE UAE

IN THE UAE, ONE OF ACWA POWER’S

NEWEST STRONGHOLD MARKETS,

NOOR ENERGY 1 IPP WILL PROVIDE:

• 950 MW of power capacity through

a combination of CSP and PV

• Clean energy for more than 270,000

residences in Dubai

• 1.4 Mn tonnes of carbon emissions

avoided per year


950 MWpower capacity of Noor

Energy 1 IPP

270,000homes will be powered through

clean energy


In December 2018, ACWA Power won the

bid to develop Rabigh 3 IWP, which will be

Saudi Arabia’s largest independent water

desalination plant. Rabigh 3 IWP will utilise

state-of-the-art reverse osmosis technology,

which consumes less power per m3 of

water than any other available technology.

As part of its build-own-operate model,

ACWA Power is developing the plant

and will hold 70 percent share of the

operational asset.

By leveraging innovative new technologies

to create efficiencies and increase output,

Rabigh 3 IWP will contribute greatly to

servicing the water needs of 5.7 Mn

people living in the Mecca and Jeddah

region, including during peak demand

periods such as the Holy Month of

Ramadan and Hajj Seasons.

RABIGH 3 WILL PROVIDE

THE REGION WITH:

• 600,000 m3/day of desalinated water

• Water for more than 5.7 Mn people

in the Mekkah and Jeddah regions 1,2


#3 MULTI-TECHNOLOGY AND OWN OPERATOR

ACWA Power’s position as technology-neutral offers flexibility

to leverage promising new technologies and suppliers.

Additionally, the Company’s commitment to maintaining the

majority-share of its operational assets allows for maximum

control, which helps maximise efficiency and generate

stable returns over the long term.

LEADING TECHNOLOGY

HARNESSED IN LARGEST WATER

ASSET: RABIGH 3 IWP

STRATEGY IN ACTION CONTINUED

600,000m3/day of desalinated water

5.7 Mnpeople will be provided

with water


STRATEGIC REPORT DIRECTORS’ REPORT STRATEG

Y

IN A

CTIO

N


OPERATIONAL REVIEW

BIDS WON

In 2018, ACWA Power won a number of bids for new projects,

continuing to strengthen its foothold, both in its home market

of Saudi Arabia and its target markets.

In August, ACWA Power signed Head of Terms with Saudi Aramco

for Saudi Arabia’s Jazan Economic City IGCC Gasification/Power

plant, an approximately 43 Bn SAR, 25-year project.

In Vietnam, ACWA Power entered a joint development agreement

for Vin Hao PV, a solar PV plant with a capacity of 41 MW – the first

renewable energy project developed by ACWA Power in the nation.

ACWA Power also was the lowest bidder for Askar PV, a solar PV

plant in Bahrain with a total capacity of 160 MW, and Kom Ombo PV,

a 260 MW solar plant in Egypt, both of which were subsequently

awarded to the Company in 2019.

In addition to contributing to the renewable energy share of these

countries, Vin Hao PV, Askar PV and Kom Ombo PV represent

strategic wins for ACWA Power as it continues to grow its new

markets of Vietnam, Bahrain and Egypt.

An additional five projects, won in 2018, were also signed into contract

and thus moved into Advanced Development during the same year.

PROJECTS IN ADVANCED DEVELOPMENT

In 2018, ACWA Power signed contracts for five major projects,

moving them into the Advanced Development stage.

Three important water projects moved into Advanced Development

in 2018: Rabigh 3 IWP in Saudi Arabia, the largest independent

reverse-osmosis water desalination plant in the world, expected

to produce 600,000 m3 per day, Al Dur Phase II IWPP in Bahrain

and Umm Al Quwain IWP in the United Arab Emirates.

In Egypt, ACWA Power signed a 25-year build-own-operate PPA

in November for Dairut IPP, a combined cycle gas turbine plant

also capable of firing alternative liquid fuels.

In one of its newest stronghold markets, Dubai, ACWA Power signed

the contract for NOOR Energy 1 IPP, a first-of-its-kind technology

mix of the world’s tallest CSP tower, three parabolic trough CSP

stations and 250 MW of PV panels, yielding a total capacity of

950 MW. The 16,210 Bn SAR NOOR Energy 1 project – one of

ACWA Power’s largest investments to date – will help the UAE

reach its goal of a 50 percent clean energy mix by 2050.

In Advanced

Development:

NOOR Energy 1 IPP

In Operation:

Salalah – Greenfield

expansion

In Advanced

Development:

Umm Al Quwain IWP

In Operation:

NOORo II CSP IPP

Bid Awarded:

Salalah IWP

A YEAR OF

ACCOMPLISHMENTS

JAN FEB MAR APR MAY JUN

In Operation:

Rabigh 2 IPP



PROJECTS UNDER CONSTRUCTION

In November 2018, ACWA Power broke ground on Sakaka PV IPP,

the first utility-scale solar plant in the Kingdom of Saudi Arabia.

Commercial operation of the 300 MW PV solar plant is scheduled

for Q4 2020. The first renewable energy project under the King

Salman Renewable Energy Initiative, Sakaka PV IPP will supply

45,000 households with power in Al Jouf, while offsetting over

430,000 tonnes of carbon dioxide a year.

ACWA Power also began construction on the Ben Ban PV IPP project

in Egypt – three solar assets slated for commercial operation in 2019.

Ben Ban PV IPP will contribute to the country’s renewable energy

target of 20 percent by 2022.

In Oman, Salalah IWP, a reverse-osmosis water desalination plant

that ACWA Power will build, own and operate, was won in April and

moved to construction later in the year, and in the UAE, the Hassyan

IPP plant entered the construction phase and is scheduled to be

operational by Q1 2023.

.

PROJECTS IN OPERATION

ACWA Power moved nine projects into operation in 2018.

In Morocco, ACWA Power began operation of Khalladi Wind IPP,

which has a 120 MW of capacity. Additionally, NOOR PV1 IPP,

consisting of three PV assets, NOORo II CSP IPP and NOORo III

CSP IPP, all of which, in total, have a power capacity of 485 MW,

came online in 2018.

One of ACWA Power’s investments in its home market of Saudi Arabia

also came online in 2018: the natural gas Rabigh 2 plant, a 2,060 MW

combined cycle power plant.

In Jordan, two of ACWA Power’s natural gas and solar assets began

operating in 2018: Zarqa IPP, a 485 MW combined cycled natural

gas plant, and the 50 MW Mafraq PV IPP project, which is the first

utility-scale solar plant in Jordan.

In Oman, Salalah 2 IPP – Greenfield, a 445 MW expansion of

Salalah 2 IPP – Existing, a natural gas project, was completed

ahead of schedule and moved into operation in March 2018.

Under Construction:

Hassyan IPP

In Operation:

Khalladi Wind IPP

Bid Awarded:

Vin Hao PV

In Advanced

Development:

Al Dur Phase II IWPP

In Operation:

NOORo III CSP IPP

In Operation:

NOOR PV1 IPP

– three assets

In Advanced

Development:

Dairut IPP

Under Construction:

Sakaka PV IPP

Under Construction:

Salalah IWP

In Advanced

Development:

Rabigh 3 IWP

Lowest Bidder:

Askar PV

In Operation:

Mafraq PV IPP

9ACWA Power moved nine

projects into operation

in 2018

JUL AUG SEP OCT NOV DEC

Under Construction:

Ben Ban PV IPP

Lowest Bidder:

Kom Ombo PV

Head of

Terms Signed:

Jazan Economic

City IGCC

In Operation:

Zarqa IPP


CHAIRMAN’S INTRODUCTION TO GOVERNANCE

Sound corporate governance is the foundation on

which ACWA Power is built and operates. Applying

leading practice, we distribute the various rights and

responsibilities among the Group’s diverse participants,

including the Board of Directors, management team

and staff, to protect the interests of, and deliver value

to, our shareholders and other stakeholders.

ACWA Power has 50 assets across 11 countries, with

the opportunity to make an impact across generations

in each community in which we operate. The strong

and transparent framework by which we structure and

conduct our business helps ensure that we are meeting

the needs of our stakeholders while creating lasting

value for our shareholders.

GOVERNANCE

AND LEADERSHIP



CODE OF CONDUCT

AND BUSINESS ETHICS

Serving as the ethical roadmap for the Group,

its Directors and its employees, the Code

of Conduct and Business Ethics catalogues

ACWA Power’s values, ethics and business

principles. The code contains the Company’s

anti-bribery and anti-corruption policies and

describes the reporting process for non-

adherence to the code. Internal audit, risk

management and internal control processes

are also defined and continue to meet

progressive governance standards.

CORPORATE GOVERNANCE STRUCTURE

ACWA Power’s corporate governance

structure consists of a Board of Directors

and five functional Board Committees,

each responsible for reviewing the Company’s

operations within their particular areas

of expertise and then presenting their

findings and suggestions to the wider

Board of Directors.

Those functional Board Committees are:

Board Executive Committee; Board Audit

Committee; Risk & Compliance Committee;

Nomination and Remuneration Committee;

and Conflict Of Interest & Related Party

Transaction Committee.

The roles and responsibilities of each of

these Committees is expanded upon in the

Directors’ Report. The Company Board, its

advisors, its functional committees, Company

management and employees, shareholders

and direct stakeholders are guided by the

Company’s Corporate Governance Guidelines

and Procedures and Code of Ethics.

LEADERSHIP OF THE COMPANY

The Board of Directors has 11 members,

comprising shareholder representatives

and a selection of experienced independent

members who are industry experts. The

management team leads, supervises and

controls the Company, with oversight and

guidance from the Directors and the Board

Committees. The Directors bring with them

deep and wide-ranging experience of

corporate governance, operations and

maintenance, finance, business development

and institution building. The management

team’s academic and professional qualifications

in the fields of administration, management,

finance and engineering complement their

leadership skills.

The Executive Management Committee,

ExCom, distinct from the Board Executive

Committee, consists of the President &

Chief Executive Officer (CEO), Managing

Director, Chief Investment Officer (CIO),

Chief Financial Officer (CFO), Chief Strategy

Officer (CSO), Chief Technology Officer and

the VP of Human Resources.

Eight Board meetings were held during 2018

as well as one Board strategy meeting to

guide the Company’s business progress and

review strategies for operational expansion

through new projects across ACWA Power’s

targeted geographies. These meetings

were convened with the issuance of proper

notices, the agenda and relevant working

papers. The Chairman presided at all

meetings, and the meeting minutes were

appropriately recorded, circulated and

approved. The Board of Directors approved

the audited financial statements of the

Company on 24 April 2018.

Mohammad Abunayyan

Chairman

“ Serving as the ethical

roadmap for the Group, its

Directors and its employees,

the Code of Conduct and

Business Ethics catalogues

ACWA Power’s values, ethics

and business principles.”


Mr. Mohammad Abunayyan

Mr. Sulaiman Al Muhaidib

Mr. Rasheed Al Rasheed

H.E. Mr. Ahmed Al Rajhi

Mr. Tariq Almutlaq

Mr. Ibrahim Alromaih

Dr. Mohsen Khalil

Chairman of the

Board of Directors

Member of the

Board of Directors

Member of the

Board of Directors

Member of the

Board of Directors

Member of the

Board of Directors

Member of the

Board of Directors

Member of the

Board of Directors

BIOGRAPHY

With more than

37 years of experience

in the commercial

and industrial sectors,

Mr. Abunayyan serves

as Chairman of ACWA

Power, Vision Invest,

Dussur and numerous

local and regional

companies. He is

widely recognised

as one of the most

respected leaders

in the water and

energy sectors.

Under his leadership,

ACWA Power has

grown into a leading

private sector energy

and water provider,

achieving significant

milestones since

his inception of

the Company.

Mr. Al Muhaidib is

the Chairman of

Al Muhaidib Group

and a number of

companies including

Savola Group and

RAFAL Real Estate

Development.

With over 29 years

of experience,

Mr. Al Rasheed has

a strong track record

in management,

information

technology,

accounting and

finance. He is a

member of the

Board of Directors

of Vision International

Investment Company

and is an active

member of several

reputable organisations

in KSA and the GCC,

including the Saudi

Organization for

Certified Public

Accountants (SOCPA),

Saudi Economy

Association and

the Family Business

Council of the

Gulf Cooperation

Council. Currently,

Mr. Al-Rasheed serves

as Chairman, Managing

Director and/or is a

member of the Board

of Directors of more

than 8 regional

companies.

H.E. Mr. Al Rajhi is

the Chairman of

the Council of Saudi

Chambers, Riyadh

Chamber of

Commerce & Industry

and Vice President

of the Federation of

the GCC Chambers.

In addition, H.E. chairs

and/or is a member

of the Board of

Directors of eminent

local and regional

companies, across

several sectors,

including but not

limited to financial

services, petrochemical

and philanthropy.

Mr. Almutlaq is the

Vice-Chairman and

Managing Director

of Almutlaq Group;

a closed joint stock

company with

diversified holdings

in industrial

manufacturing,

real estate, utilities

and financial sector.

He is the Chairman of

Almutlaq Real Estate

Investment Company

and sits on boards

of various companies

operating in the

petrochemical,

financial and industrial

sectors. Mr. Almutlaq

was appointed as a

member of ACWA

Power’s Board of

Directors and board

committees in 2008.

Mr. Alromaih is the

Chief Executive Officer

of Saudi Arabian

Investments Company

(‘Sanabil Investments’).

He was appointed as

a member of ACWA

Power’s Board of

Directors in 2013.

Prior to joining Sanabil

Investments in 2009,

Mr. Alromaih was

appointed, by a royal

decree, as the Vice

Chairman of the

Capital Market

Authority in 2004.

He served as Assistant

Secretary General of

the Public Investment

Fund from 1985

until 2004.

Dr. Khalil is the

Founder of MAKVEST,

which provides

financial advisory

services to companies

focusing on emerging

markets. Previously, he

held various executive

positions with IFC

and the World Bank,

including Director

of IFC’s Central Asia,

Middle East and North

Africa and joint World

Bank/IFC Director of

the Global Information

and Communication

Technologies

Department.

Dr. Khalil also served

as a Business Professor

at the American

University of Beirut,

advisor to various

governments and

major corporations,

in addition to working

with McKinsey & Co.

APPOINTED

22 June 2008 22 June 2008 22 June 2008 22 June 2008–

June 2018

29 November 2008 2 January 2013 23 February 2015

MEMBERSHIP STATUS

Non-Executive Non-Executive Non-Executive Non-Executive Independent Non-Executive Independent

EXTERNAL APPOINTMENTS

Mr. Abunayyan chairs

and/or is a member of

the Board of Directors

of several world-

leading organisations,

in addition to holding

a number of

prestigious honorary

and leadership

positions focused

on transforming

and diversifying

the economy of

Saudi Arabia.

Mr. Al Muhaidib sits

on the Board of

Directors of Saudi

British Bank (SABB),

Almarai Company,

Vision Invest, Prince

Salman Centre for

Disability Research

and Prince Fahad

Bin Salman Charity

Association for Renal

Failure Patients Care.

Mr. Al Rasheed is a

member of several

organisations in KSA

and GCC including

Saudi Organization

for Certified Public

Accountants (SOCPA),

Saudi Economy

Association and

the Family Business

Council of the Gulf

Cooperation Council.

H.E. Mr. Al Rajhi chairs

the Council of Saudi

Chambers, Riyadh

Chamber of

Commerce & Industry,

Trio Mada International

Plastic Company,

MATTEX Company,

AEP Company and

numerous other

companies, including

Vice Chairman of

Al Rajhi Holding

Company. His

Excellency holds

numerous seats on

government and

socially responsible

funds and committees.

Mr. Almutlaq sits on


of several companies,

including Middle East

Paper Company,

Riyadh Cables Group

of Companies, Qassim

Cement, Watani

Wealth Management

Company, Almutlaq

Real Estate Investment

Company, Himmah

Capital and Daikin

Saudi Arabia.

Mr. Alromaih chairs

and/or is a member of


of several local

and international

companies, including

National Commercial

Bank of Saudi Arabia.

Dr. Khalil is a member

of the Board of

Directors for many

companies and funds

at different stages

of growth.

COMMITTEES

E A C

E

N C

E C

E

BOARD OF DIRECTORS E Executive Committee A

Audit Committee N

Nomination and Remuneration

Committee



Mr. David Crane

H.E. Mr. Mohammed Al Nahas

Mr. Federico Tauber

Dr. Ibrahim S. Al Rajhi

Mr. Omar AlMidani

Mr. Raid Ismail

Member of the

Board of Directors

Member of the

Board of Directors

Member of the

Board of Directors

Member of the

Board of Directors

Member of the

Board of Directors

Member of the

Board of Directors

Mr. Crane was

appointed as a

member of the Board

of Directors of ACWA

Power and board

committees in 2016.

Prior to joining ACWA

Power, Mr. Crane

served as President

and CEO of NRG

Energy and NRG Yield,

the largest non-utility

power company in the

USA. He was also CEO

and Executive Director

of International Power

and Senior Vice

President of Global

Power at Lehman

Brothers, where

he was responsible

for the Global

Power business in

emerging markets.

His Excellency is

the Governor of

the Public Pension

Agency, as per royal

decree no. A/236

dated 16/11/1437H.

He has more than


in the banking sector

where under his

leadership, Alinma

Bank saw significant

growth and expansion

as a leading financial

institution. Currently,

H.E. chairs and/or

is as a member of the

Board of Directors on

numerous esteemed

organisations. H.E

received his BSc.

in Accounting from

King Saudi University

in KSA and an

Executive Program

from Michigan Ross

business school

in the USA.

Mr. Tauber has over


in investment banking,

financial services, real

estate and corporate

restructuring. He

currently serves

as the CEO of

Gemstone Real

Estate Development

Company. Prior to this,

he was the President

of Tameer Holding

Investment and Vice

President of Business

Development of

Al Rajhi Holding and

Managing Director

of Citigroup.

Dr. Al Rajhi is the

Chairman of Arabian

Cement Company,

a public joint stock

company, and other

reputable companies

in Saudi Arabia. In

addition, he sits on


of several local

companies including

Al Rajhi Holding Group,

a closed joint stock

company with

diversified investments

including, but not

limited to, financial

services, real estate,

industrial, contracting

and infrastructure.

Dr. Al Rajhi received

his Master of Science

in Management from

the United States

and a Ph.D. from

the United Kingdom.

Mr. AlMidani is the Chief

Executive Officer of

Vision Invest, a leading

Saudi Development &

Investment Holding

Company with active

investments in the

Power & Water,

Industrial Gases, District

Cooling, Waste Water

Treatment, Logistics

and Environmental

Solutions Sectors.

Mr. AlMidani has served

in multiple roles within

Vision Invest over the

past 9 years, including

as Chief Executive

Officer of Beatona,

a Vision Invest

Subsidiary specialised

in Environmental

Treatment

Infrastructure, Waste

Management and

Recycling. Mr. AlMidani

is a member of the

Young Presidents

Organization and

holds a Bachelors of

Commerce Degree

(Finance) with Honours

from the John Molson

School of Business

in Montreal, Canada.

Mr. Ismail is the

Director of Direct

Local Holdings within

the Public Investment

Fund. He has extensive

experience in business

development,

operations and

strategy, including

but not limited to

change management

and organisational

turnovers and

transformations.

Mr. Ismail has held

various executive

management

positions, including

General Manager

of Mawarid Food Co.,

CEO of Saudi Tadawi

Health Care Group

and Founder/

Managing Partner of

House of Retail LLC.

He received his BSc. in

Finance from the USA

and an MBA from the

prestigious London

Business School,

United Kingdom.

10 December 2015–

June 2018

16 June 2016 16 June 2016 18 June 2018 18 June 2018 9 July 2018

Non-Executive Independent Non-Executive Non-Executive Non-Executive Non-Executive

Mr. Crane served as a

member of the Board

of Directors of ACWA

Power, Vision Invest

(formerly known as

‘ACWA Holding’) and

ACWA Guc.

His Excellency is the

Chairman of ASMA

Capital, Al Raidah,

Raza, SPIMACO

ADDWAEIH and

Taawuniyah Real

Estate Investment.

In addition, he is a

member of the Board

of Directors and

Committees of SABIC,

STC, Riyad Bank,

National Centre of

Privatization and the

General Organization

for Social Insurance.

In addition to leading

Gemstone, Mr. Tauber

sits on the Board of

Directors of AEP

Investment and

Basil Trust.

Dr. Al Rajhi is the

Chairman of Arabian

Cement Company,

Tibah Airports

Development Co

and Tibah Airports

operation Co.

In addition, he sits on


of Al Rajhi Holding

Group.

Mr. AlMidani sits on


of several Saudi

Companies, including

Saudi Tabreed, Qudra

Energy, Miahona and

Etihad International

ESCO.

Mr. Ismail sits on the

Board of Directors of

several companies,

including Credit Suisse

of Saudi Arabia.

E R E E E

N

R Risk & Compliance Committee C

Conflict Of Interest & Related

Party Transaction Committee Indicates Committee Chairman


ACWA POWER BOARD OF DIRECTORS’ REPORT FOR THE FINANCIAL YEAR 2018

Dear Esteemed ACWA Power Stakeholders,

The ACWA Power Board of Directors are pleased to present the Annual Report and audited

financial data relevant to ACWA Power – (‘ACWA Power’ and/or ‘The Company’) for the

year ending on the 31st December 2018 (referred as the current year).

GENERAL

The International Company for Water and Power Projects (‘the Company’) is a Saudi joint stock company established pursuant to a ministerial

resolution numbered 215 dated 2 Rajab 1429H (corresponding to 5th July 2008) and registered in Riyadh, the Kingdom of Saudi Arabia under

commercial registration number 1010253392 dated 10 Rajab 1429H (corresponding to 13th July 2008). The Company and its project companies,

collectively ‘the Group’, are engaged in: (i) the development, acquisition, leasing, operation and maintenance of power generation, steam production

and desalinated water production plants; (ii) the sale of electricity and desalinated water; and (iii) other related or auxiliary businesses activities.

FINANCIAL RESULTS

In 2018, ACWA Power experienced stable growth in its operating income before impairment and other expenses, achieving another year of

double-digit growth. This is a testament to the Group’s resiliency and ability to deliver on its sustainable growth strategy to deliver high-quality,

efficient power and water at low cost, while contributing to the communities in which ACWA Power operates. For the year 2018, the Group

achieved an Operating Income before impairment and other expenses 1 of 1,980 Mn SAR (2017: 1,433 Mn SAR) and a net loss of 774 Mn SAR

(2017: Net Income 920 Mn SAR).

KEY ACCOMPLISHMENTS IN YEAR ENDED 2018

In 2018, ACWA Power’s power generation portfolio capacity reached 29.3 GW and its water capacity reached 3.9 Mn m3/day of desalinated

water inclusive of assets under construction. In addition to this, ACWA Power has under advance development power generation capacity of

6.4 GW and water generation capacity of 1 Mn m3/day of desalinated water. The asset portfolio of 50 projects includes 32 operational assets,

10 projects under construction and eight projects in advanced development phase. As of 31st December 2018, ACWA Power’s asset portfolio

comprises 18 renewable assets 2.

The Group brought nine projects into operation in 2018 – more than any other single year of operations and grew its operational power

portfolio by 28 percent. The Company continued to grow its portfolio through new business development in 2018 and grew the water

portfolio by 36 percent and the power portfolio by 7.5 percent.

KEY HIGHLIGHTS INCLUDE:

• Awarded contract for Rabigh 3 IWP, the then largest independent reverse-osmosis water desalination plant in the world (600,000 m3/day).

• Began construction on the first utility-scale solar plant in Saudi Arabia, Sakaka PV IPP (300 MW).

• Awarded contract for NOOR Energy 1 (950 MW), a novel technology mix that includes the world’s tallest CSP tower, three parabolic trough

CSP stations, and PV panels.

• Commercial operation of NOORo II CSP, the largest CSP plant in the world.

• Signed a Head of Terms for a 43 Bn SAR, 25-year joint venture with Saudi Aramco and Air Products for the Jazan Economic City IGCC

Gasification/Power Plant in which ACWA Power would be a 25 percent shareholder.

• The 814 MUSD 144a-Reg S Bond “ACWA 39”, ACWA Power’s maiden Corporate bond, was trading at YTM of 6.45 percent (59 bps pa

increase YoY), holding ground against the benchmark Barclays GCC index, which saw its YTM widen by 92 bps in 2018.

BOARD OF DIRECTORS

The Board of Directors held a total of nine meetings during 2018 to guide the Company’s business progress and review strategies for

operational expansion through new projects across ACWA Power’s targeted geographies.

The Company held an Extra Ordinary General Assembly Meetings (EGM) on 26 June 2018, and two Ordinary General Assemblies on

09 August 2018 and 06 December 2018, respectively. The agendas were as follows:

EXTRAORDINARY GENERAL ASSEMBLY AGENDA (26 JUNE 2018):

1. Vote on the auditor’s report for the fiscal year ending as of 31/12/2017;

2. Vote on the Board of Directors’ report for the fiscal year ending as of 31/12/2017;

3. Vote on the financial statements of the Company for the fiscal year ending as of 31/12/2017;

4. Vote on discharging the Board members for the fiscal year ending as of 31/12/2017;

5. Vote on appointing Ernst & Young as the Company’s external auditors for the fiscal year 2018, in line with the endorsement of the

Audit Committee, for the proposed fees amounting to 557,500 SAR (for statutory and special purpose zakat financial statements);

6. Voting on the remuneration of the members of the Board of Directors as stated in the Board Report;

1 Discontinued operations were classified as a separate line item.

2 Including projects in advanced development.



7. Voting on the remuneration of the Board Audit Committee members;

8. Vote on distributing interim and final dividends to shareholders in an amount of 126.7 Mn SAR and 82.1 Mn SAR, respectively,

amounting to a total of 208.8 Mn SAR for the fiscal year ending as of 31/12/2017;

9. Affirmative vote on delegating the Board of Directors to distribute interim dividends for 2018;

10. Vote on accepting the proposed amendments to the bylaws;

11. Affirmative vote on the pre-emption right stated in article 14 of the Company’s bylaws;

12. Affirmative vote on increasing the Company’s capital from 5,476,037,210 SAR to 6,457,628,780 SAR divided to 645,762,878 shares

with share value 10 SAR, provided that the total shares value to be paid in cash, which means that the new shares in the Company

shall be fully paid. The capital increase was for the subscription of the Public Investments Fund to 98,159,157 shares;

13. Affirmative vote on increasing the Company’s Board composition to 11 members instead of 10 with the additional one member

to represent the Public Investment Fund;

14. Affirmative vote on appointing a new Board member, representing the Public Investment Fund; and

15. Affirmative vote on appointing two new Board members in place of the two resigning members – Eng. Ahmed Al Rajhi and

Mr. David Crane, respectively.

9 AUGUST 2018:

1. Voting on appointing Mr. Raid bin Abdullah Ismail as a Board of Director, representing the Public Investment Fund.

2. Voting on paying 22,250,000 Saudi Riyals (twenty-two millions and two hundred and fifty Saudi Riyal) to the Arabian Company for

Power and Water Development (ACWA Holding) in exchange for ACWA Holding to approve to change its trade name, so as not to include

“ACWA” or the following words “Arabian Company for Water and Power” whatever the order is, and no partner or company affiliated to the

Company is entitled to use this trade name or these words mentioned above for their interest. The approval was required because some

Board members (i.e. – Mr. Mohammad Abunayyan, Mr. Rasheed Al Rasheed, Mr. Sulaiman Al Muhaidib and Mr. Omar Almidani) are

representing ACWA Holding and some members also hold equity shares in the Company.

3. Vote on all business and contracts in force, which is deemed as a conflict of interest as well as approving upcoming business and contracts

between the Company and British Saudi Bank and Riyadh Bank, respectively, given that Mr. Sulaiman Al Muhaidib is a board member of the

former and Mr. Mohammed Talal Al-Nahas of the latter bank. All upcoming business and contract shall be competitive and comply with

market conditions, at the present time. Please see table below.

TABLE 1: DISCLOSURE OF CONFLICT OF INTERESTS

Bank Transaction

SABB SABB is providing

non-funded

facilities to ACWA

Power to support

our obligation as

shareholder in

various projects;

these are mainly

Debt Service

Reserve Account

stand by letter of

credit (DSRALC),

Liability Account

stand by letter of

credit (LRALC).

Project name Obligor Guarantor Currency Insurance date

Total amounts o/s

as of 30 June 2018

Rabigh IWSPP ACWA Power

Projects

ACWA Power

International

SAR28 June 2010

– Revolving

facility

4,308,131

Rabigh IWSPP ACWA Power

Projects

ACWA Power

International

SAR 60,490,429

Shuaqaiq IWPP ACWA Power

Projects

ACWA Power

International

SAR 21 Sep 2011

– Revolving

facility

92,862,000

Qurayyah IPP ACWA Power

Projects

ACWA Power

International

SAR30 Sep 2014

– Revolving

facility

14,182,396

Qurayyah IPP ACWA Power

Projects

ACWA Power

International

SAR 28,387,763

Riyad Bank Riyad Bank approved the below new facilities, amounting to 1,137.50 Mn SAR. These facilities have not been utilised

nor has the Company entered into any facility documentation.

1. Equity Bride Loan amounting to 170 Mn USD (637.5 Mn SAR eq) for Rabigh 3 IWP projects. This was approved by the

Board Executive Committee (BEC) as part of the project’s required approval.

2. General bonding and SBLC line amounting to 500 Mn SAR. BEC and Board approval will be sought once the

documentation is finalised.


ACWA POWER BOARD OF DIRECTORS’ REPORT FOR THE FINANCIAL YEAR 2018 CONTINUED

BOARD OF DIRECTORS CONTINUED

6 DECEMBER 2018:

1. To vote to waive the legal requirement of a “21 days” notice period to inform the shareholder prior to convening the general assembly

meeting, in accordance with article (91) of the Companies’ Law and article (36) of the Company’s articles of association;

2. To vote in according with article (71) of the Companies’ Law on the following related party transactions:

a. Sale transaction of related parties containing sale from ACWA Power Company or a subsidiary of ACWA Power through indirect

ownership of 30.4 percent in ACWA GUC ELEKTRIK ISLETME ve YONETIM SANAYI ve TICARET A.S., a Turkish project company owner

of Kirikkale gas plant (Project Company) to some shareholders of ACWA Power (or to one of their affiliates) “Purchasing Partners.”

The representatives of shareholders in the Board of Directors stated the existence of direct or indirect interest, as a result of sale

of shares in the project company for five American dollars to the Purchasing Partners in addition to a joint venture agreement

and any other agreements required to execute the transaction with the related parties and the right to compensation and warranty

for the following shareholders:

• Vision International Investment Company (formerly known as the Arabian Company for Power and Water Development)

• Al Rajhi Holding Group Company

• Al Mutlaq Group Company

• Future Industrial Investments Company 3

• Al Toukhi Commercial Group Company 3

(“Transaction with the Related Parties”)

b. The following members of the Board of Directors of ACWA Power have direct or indirect conflict of interests as a result of the

transaction, dealings with the related parties:

• Mr. Mohammad Abunayyan

• Mr. Sulaiman Al Muhaidib

• Mr. Rasheed Al Rasheed

• Mr. Omar Almidani

• Dr. Ibrahim Al Rajhi

• Mr. Federico Tauber

• Mr. Tariq Almutlaq

ACWA POWER BOARD MEETING SCHEDULE FOR YEAR 2018

The table below lists members of the Board of Directors and their respective attendance for the year 2018:

Board of Directors name Designation/Position

API Board Meeting (2018) – Attendance

29 Jan 1 Mar 24 Apr 29 May 9 Jul 9 Sep 13 Nov 12 Dec 13 Dec

RUH RUH RUH RUH RUH RUH RUH RUH RUH

Mohammad Abunayyan Chairman

Sulaiman Al Muhaidib Board Director

Ahmed S. Al Rajhi Board Director N/A N/A N/A N/A N/A

Rasheed Al Rasheed Board Director

Tariq Almutlaq Board Director

Ibrahim Alromaih Board Director

Mohsen Khalil Board Director

David Crane Board Director N/A N/A N/A N/A N/A

Federico Tauber Board Director

Mohammed Al Nahas Board Director

Ibrahim Al Rajhi Board Director N/A N/A N/A N/A

Omar Almidani Board Director N/A N/A N/A N/A

Raid Ismail Board Director N/A N/A N/A N/A

Legend: ( ) Present; ( ) Apology; (N/A) Not a Board member at that time or has resigned.

Note: The Board appointed Ms. Hager Al-Twegieri as the new Board Secretary on 9 September 2018.

3 Future Industrial Investments Company and Al Toukhi Commercial Group Company elected to not participate in the deconsolidation of Kirikkale and notified the

Company the day of the General Assembly Meeting.



A. BOARD AUDIT COMMITTEE

The members of the Board Audit Committee (BAC) have the required knowledge and experience in accounting, risk management

and commercial laws that enable them to perform their duties.

During the year, the BAC reviewed key internal audit findings across operational, risks, financial and compliance matters. The Company’s

Internal Audit function also presented its report and findings on internal control system. The BAC ensures that the financial statements are

prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by Saudi Arabia, by utilising the IFRS practices

in preparation of 2018 financial statements.

Through self-assessment, the BAC evaluates its performance on an annual basis, reviews its compliance status under the Committee’s charter,

and confirms that it fulfils its duties and responsibilities.

The Committee is chaired by an independent member.

The table below lists the Board Audit Committee members and their respective attendance for the year 2018:

BAC Meeting (2018) – Attendance

Name Designation/Position

20 Mar 5 Jul 5 Sep 6 Dec

DXB RUH RUH Oman – Site

Mr. Harold Manasa Chairman

Mr. Rasheed Al Rasheed Member

Mr. Abdulrahman Al Khelaifi Member

Dr. Ammr Kurdi Member N/A N/A

Mr. Khalid Al Rabiah Member N/A N/A N/A

Legend: ( ) Present; ( ) Apology; (N/A) Not a Committee member at that time.

B. BOARD RISK & COMPLIANCE COMMITTEE

The Board Risk & Compliance Committee (BRCC) supports the Board in the execution of its fiduciary responsibility in overseeing and reviewing

(i) management’s identification and evaluation of the Company’s principal strategic, financial, operational, business and compliance risks,

including the Company’s risk management framework and the policies, procedures, and practices employed to manage risks; and (ii) the

Company’s Compliance programme.

The Committee supports the Board in monitoring the Company’s risk environment and provides direction to mitigate risks that may adversely

affect the Company’s ability to achieve its objectives.

The Committee is chaired by an independent member.

The table below lists the Board Risk and Compliance Committee members and their respective attendance for the year 2018:

BRCC Meeting (2018) – Attendance


22 Mar 2 Aug 4 Oct 10 Dec

DXB RUH DXB RUH

Dr. Khalid Al Faddagh Chairman

H.E. Mohammed Al Nahas Member

Dr. Ammr Kurdi Member

Mr. Mohamed El Roubi Member

Mr. Harold Manasa Member

Legend: ( ) Present; ( ) Apology; (N/A) Not a Committee member at that time.



C. BOARD EXECUTIVE COMMITTEE

The Board Executive Committee (BEC) is a standing Committee of the Board with delegated responsibilities by the Company’s Board of

Directors. The BEC consists of seven members who are appointed by the Board and all of whom are members of the Board of Directors,

as of the end of December 2018. The Board Executive Committee held 16 meetings during the year 2018.

The primary purpose of the BEC is to review and approve new investment opportunities, in line with the delegated authority stipulated

in the Committee’s charter. Accordingly, the management regularly engage with the Committee to share insights and analysis on potential

new investments. In addition, the Committee has a responsibility to review and endorse studies or plans that have a significant impact on

the operations of the Company including, but not limited to, five-year business plans, operating plans and capital expenditure programmes,

for Board approval. Overall, the Board Executive Committee is responsible to provide direction, guidelines and approvals for investments

in projects, strategic business plans and all associated decisions. In line with the powers delegated to the Committee, the BEC, also reviews

the Company budget and oversees the development of projects.

The table below lists the Board Executive Committee members and their respective attendance for the year 2018:

BEC Meeting (2018) – Attendance

Name

Designation/

Position 14 Jan 12 Feb 14 Mar 28 Mar 15 Apr 24 Apr 24 May 28 Jun 4 Jul 8 Jul 29 Jul 9 Sep 22 Oct 6 Nov 26 Nov 29 Nov

Mr. Mohammad

Abunayyan Chairman

Mr. Tariq

Almutlaq Member

Mr. Ibrahim

Alromaih Member

Dr. Mohsen

Khalil Member

Mr. David Crane Member N/A N/A N/A N/A N/A N/A

Mr. Federico

Tauber Member

Mr. Omar

Almidani Member N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Mr. Raid Ismail Member N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Legend: ( ) Present; ( ) Apology; (N/A) Not a Committee member at that time or has resigned.



D. CONFLICT OF INTEREST & RELATED PARTY TRANSACTION COMMITTEE

The Conflict of Interest & Related Party Transaction Committee’s primary purpose is to review and approve related party transactions and

conflicts of interest, as provided for under the Company’s bylaw and the Corporate Governance Regulations issued by the Capital Market

Authority and as set out in the Board-approved Related Party Transactions and Conflicts of Interest Policy (‘the RPTCI Policy’).

The Committee is constituted by the Board and functions in line with its Board-approved Committee charter, which complies with the

Company’s Code of Corporate Governance policy. The Committee supports the Board in reviewing and approving matters and transactions

that involve related party transactions, with its direct shareholders, and potential conflicts of interests within the Company. This includes the

review of materially significant related party transaction disclosures contained in the Annual Report or in the Company’s financial statements.

Any approval or rejection given by the Conflict of Interest & Related Party Transaction Committee is considered as an approval or rejection

by the Board of Directors 4.

The Conflict of Interest & Related Party Transaction Committee met five times in 2018. The Committee consists of three members,

with the Chairman of the Committee being an independent Board member.

The table below lists the Conflict of Interest & Related Party Transaction Committee members and their respective attendance for the

year 2018:

RPTC Meeting (2018) – Attendance


27 Feb 15 Apr 5 Aug 1 Oct 6 Nov

RUH RUH RUH RUH RUH

Dr. Mohsen Khalil Chairman

Mr. Tariq Almutlaq Member

Mr. Ibrahim Alromaih Member

Legend: ( ) Present.

E. THE NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee (NRC) performs its duties in line with its Board-approved committee Charter, which complies

with the Code of Corporate Governance Policy. The NRC assists the Board in reviewing and endorsing all Board directorship and Committee

membership appointments, related policies and allowances of the Board member and Executive Management.

The Nomination and Remuneration Committee met four times in year 2018. The Committee consists of five members, with the Chairman

of the Committee being an independent Board member.

The table below lists all the Nomination and Remuneration Committee members and their attendance at 2018 meetings:

NRC Meeting (2018) – Attendance

Board of Directors name Designation/Position

20 Mar 21 May 18 Sep 28 Nov

DXB RUH DXB DXB

Mr. Tariq Almutlaq Chairman

Dr. Fahad Al Zahrani Member

Mr. John Leggate Member

Mr. Guy Richelle Member

Mr. Raid Ismail Member N/A N/A

Legend: ( ) Present; ( ) Apology; (N/A) not a Committee member at that time.

4 Please refer to Table 1 on page 33 for a list of disclosed conflicts of interest. In addition, the deconsolidation of Kirikkale as a related party transaction (refer to agenda

item #2 from the GAM held on 06 December 2018).



ALLOWANCES OF BOARD OF DIRECTORS

Each member of the Board is entitled to an annual allowance and attendance fee for each meeting attended during a given year. The Board of

Directors received a fee of 4,340,000 SAR as remuneration for their services and attendance, which excludes the Board’s expense of 302,749

SAR, for the period of 1st January 2018 to 31st December 2018.

Board of Director name Role

Annual

allowance

(SAR)

Attendance

(SAR)

Committees

allowance &

attendance fees

(SAR)

Total

(SAR)

Expenses

(SAR)

Mr. Mohammad Abunayyan Chairman 200,000 27,000 248,000 475,000 5,180

Mr. Sulaiman Al Muhaidib Member 200,000 24,000 0 224,000 0

Mr. Ahmed S. Al Rajhi Member 100,000 9,000 0 109,000 0

Mr. Rasheed Al Rasheed Member 200,000 27,000 150,000 377,000 4,702

Mr. Tariq Almutlaq Member 200,000 27,000 356,500 583,500 21,159

Mr. Ibrahim Alromaih Member 200,000 27,000 310,000 537,000 0

Dr. Mohsen Khalil Member 200,000 27,000 310,000 537,000 113,455

Mr. David Crane Member 100,000 12,000 115,000 227,000 85,844

Mr. Federico Tauber Member 200,000 24,000 232,500 456,500 29,542

Mr. Mohammed Al Nahas Member 200,000 24,000 62,000 286,000 37,512

Dr. Ibrahim S. Al Rajhi Member 100,000 15,000 0 115,000 0

Mr. Omar Almidani Member 100,000 15,000 93,000 208,000 0

Mr. Raid Ismail Member 100,000 12,000 93,000 205,000 5,355

TOTAL 2,100,000 270,000 1,970,000 4,340,000 302,749

BOARD DECLARATION FOR 2018:

As per the CG regulations requirement for the Company to make a declaration regarding non-applicable or non-existing matters, the Board

undertakes the following:

Number Declaration/Confirmation

1. The Board, through self-assessment, annually evaluates its performance, reviews the status on compliance of its obligations

under the Charter and confirms that it fulfilled its duties and responsibilities.

2. There were no penalties or precautionary attachments imposed on the Company by any supervisory, regulatory

or judicial body.

3. To the knowledge of the Audit Committee there were no critical or major observations found during the 2018 audits that

can impair the effectiveness of the Company’s internal control systems.

4. There was no conflict between the Audit Committee recommendations and the Board’s resolutions.

5. The Company’s books and records comply with the International Financial Reporting Standards (IFRS) as issued by the International

Accounting Standards Board (IASB) as endorsed by the Saudi Organization for Certified Public Accountants (SOCPA).

6. There are no interest in any class of voting shares for anyone who has notified the Company with these interests and any

change in these rights during the last fiscal year.

7. There is no interest, contractual documents and subscription rights of senior executives and their relatives in the shares

or debt instruments of the Company or its affiliates, and any change in this interest or right during the last fiscal year.

8. There are no treasury shares held by the Company for any purpose and accordingly no disclosure is required of details

of treasury shares used by the Company.

9. There are no debt instruments issued to ACWA Power and its subsidiaries except as already disclosed in audited financial

statements of the Group.

10. There is no class and number of any convertible debt instruments, contractual securities, pre-emptive right or similar rights issued

or granted by the Company during the fiscal year except as already disclosed in audited financial statements of the Group.

11. There are no conversion or subscription rights under any convertible debt instruments, contractual-based securities, warrants

or similar rights issued or granted by the Company except as already disclosed in audited financial statements of the Group.



Number Declaration/Confirmation

12. There is no redemption, purchase or cancellation by the Company of any redeemable debt instruments and the value

of such securities outstanding, whether listed securities purchased by the Company and those purchased by its affiliates.

13. The Board confirms that:

A) The Company’s accounting records were properly prepared.

B) ACWA Power’s internal control systems and procedures were properly developed and effectively executed.

C) There are no doubts about the Company’s ability to continue its business activities.

14. There is no arrangement or agreement under which a shareholder of the issuer has waived any rights to dividends.

15. The Company confirms that it does not apply any programmes for granting stock options or part of the dividends to the

employees, or any pension programmes, and there are no special funds for these programmes.

16. There were no recommendations by the Audit Committee that conflicted with the Board of Directors’ decisions. The Board

did not reject recommendations regarding the appointment of the Company’s external auditor, the dismissal, the determination

of its fees, the performance evaluation or the appointment of the internal auditor during the year.

ACKNOWLEDGEMENT

The Board of Directors would like to express their gratitude to the Custodian of the Two Holy Mosques, King Salman Bin Abdulaziz Al Saud

(may Allah protect him); His Royal Highness Prince Mohammed bin Salman bin Abdulaziz, Vice President of the Council of Ministers and

Minister of Defense, Minister of Interior; His Royal Highness Deputy Crown Prince, the Second Prime Minister; and H.E. the Minister of Finance.

The Board of Directors also graciously thanks H.E. the Minister of Environment, Water & Agriculture and H.E. the Minister of Energy, Industry

& Mineral Resources, for their continued support of the privatised electricity and water sectors.

The Directors’ appreciation extends to all government officials and relevant authorities for their continued cooperation with the Company. We

also would like to acknowledge our management and employees for their dedication to ACWA Power, and for their commitment to ensuring

ACWA Power remains an industry leader in the electricity and water sectors in Saudi Arabia and across all our target geographic regions.

Yours Sincerely,

Mohammad Abunayyan

Chairman of ACWA Power


REFERENCES

LEADERSHIP STATEMENT (PAGES 12 AND 13)

1 https://gulfnews.com/business/energy/saudi-arabia-plans-151b-investment-in-renewable-energy-1.61742719

2 https://www.albawaba.com/business/saudi-arabia-desalination-plants-red-sea-coast-1077706

MARKET OVERVIEW (PAGES 14 AND 15)

1 https://www.wri.org/blog/2015/08/ranking-world-s-most-water-stressed-countries-2040

2 http://webcache.googleusercontent.com/search?q=cache:SQykfvDJ8-wJ:www.worldwaterforum8.org/en/file/2847/download%3Ftoke

n%3DbFOTtfhS+&cd=1&hl=en&ct=clnk&gl=us

3 https://www.dnvgl.com/news/middle-east-electricity-demand-will-triple-by-2050-powered-by-rapid-growth-of-wind-and-solar-

energy-136544

4 https://www.iea.org/weo2017/

5 http://www.tradearabia.com/news/OGN_349668.html

6 https://www.albawaba.com/business/saudi-arabia-desalination-plants-red-sea-coast-1077706

7 https://www.thenational.ae/business/energy/middle-east-renewable-energy-targets-require-as-much-as-40bn-capital-investment-says-

ge-1.699558

8 https://www.iea.org/countries/Morocco

9 https://www.export.gov/article?id=Morocco-Energy

10 https://www.irena.org/documentdownloads/Publications/IRENA_Africa_Power_Sector_synethesis_2015.pdf

11 http://awsassets.wwf.org.za/downloads/wwf009_waterfactsandfutures_report_web__lowres_.pdf

12 https://www.sadc.int/themes/infrastructure/en/electricity-generation/

13 https://www.iea.org/southeastasia/

14 https://www.iea.org/southeastasia/

15 https://vietnamnews.vn/economy/463521/viet-nam-to-face-power-shortage-by-2030.html#GtIKSJhc56uF4hMc.97

16 https://www.enerji.gov.tr/en-US/Pages/Electricity

17 http://www.mfa.gov.tr/turkeys-energy-strategy.en.mfa

18 https://ec.europa.eu/energy/sites/ener/files/documents/directive_renewable_factsheet.pdf

STRATEGY IN ACTION: #1 IN THE HOME MARKET (PAGES 20 AND 21)

1 https://ksa-climate.com/making-a-difference/nrep/




STRATEGY IN ACTION: #2 DEVELOP STRONGHOLD MARKETS (PAGES 22 AND 23)

1 https://www.cia.gov/library/publications/the-world-factbook/geos/print_ae.html

2 https://www.khaleejtimes.com/business/energy/more-power-to-the-uae

STRATEGY IN ACTION: #3 MULTI-TECHNOLOGY & OWN OPERATOR (PAGES 24 AND 25)

1 http://worldpopulationreview.com/world-cities/mecca-population/

2 http://worldpopulationreview.com/world-cities/jeddah-population/

T: +971 (0)56 150 8292

GLOSSARY

CCGT Combined Cycle Gas Turbine

CEGCO Central Electricity

Generating Company

CEMP Construction Environmental

Management Plan

COD Commercial Operation Date

CSP Concentrated Solar Power

EHS Environment, Health and Safety

EMP Environmental Management Plan

EPC Engineering, Procurement,

Construction

ESIA Environmental and Social

Impact Assessment

GAMEP General Authority

for Meteorology and

Environment Protection

GCC Gulf Cooperation Council

GHG Greenhouse Gas

GRI Global Reporting Initiative

GW Gigawatt

HIWPT Higher Institute for Water

and Power Technologies

HSSE Health, Safety, Security

and Environmental

IFC The International Finance

Corporation, member

of the World Bank

IPP Independent Power Producer

ISO International Organisation

for Standardisation

IWP Independent Water Producer

IWPP Independent Water and

Power Producer

IWSPP Independent Water Steam

Power Producer

KSA Kingdom of Saudi Arabia

kWh Kilowatt hour

LTI Lost Time Incident

MED Multiple-Effect Distillation

MIGD Million Imperial Gallons per Day

MSF Multi-Stage Flash

MW Megawatt

MWp Megawatt Peak

NOMAC First National Operation &

Maintenance Company

NTP Notice to Proceed

OEM Original Equipment Manufacturer

Offtaker Contracted buyer of power

and/or water

OHSAS Occupational Health and Safety

Assessment Scheme

OTS Owner’s Technical Specification

O&M Operations and Maintenance

PCOD Project Commercial

Operation Date

PPA Power Purchase Agreement

PPP Public Private Partnership

ProjectCo Project Company

PV Photovoltaic

PWPA Power and/or Water Purchase

Agreement (P(w)PA)

ROCE Return on Capital Employed

SMEs Small and Medium Enterprises

SPV Special Purpose Vehicle

UAE United Arab Emirates

WB World Bank

WPA Water Purchase Agreement

YoY Year on YearPrinted on Neenah WW Green Conservation

Smooth, which is an FSC-recognised paper,

produced from well-managed forests, and

recycled wood or fibre.

ACWAPOWER.COM

KINGDOM OF SAUDI ARABIABUILDING 1, GROUND FLOOR,

BUSINESS GATE OFFICE COMPLEX,

AIRPORT ROAD,

P.O. BOX 22616, RIYADH 11416

TEL: +966 11 283 5555

FAX: +966 11 283 5500

KING ABDULAZIZ BRANCH RD,

ASH SHATI,

JEDDAH, 23613

TEL: +966 12 618 9000

UNITED ARAB EMIRATESTHE ONE TOWER, 41ST FLOOR,

BARSHA HEIGHTS,

SHEIKH ZAYED ROAD,

P.O. BOX 30582,

DUBAI

TEL: +971 4 2480 800

FAX: +971 4 3289 552

CHINA701-702, TAIKANG INTERNATIONAL TOWER,

NO. 2 WUDINGHOU STREET,

XICHENG,

P.O. BOX 10027, BEIJING 100033

TEL: +86 10 5979 2330

FAX: +86 10 8438 1078

EGYPTPLOT 176, SECOND SECTOR,

GIZA SYSTEMS BUILDING,

P.O. BOX 351, NEW CAIRO

TEL: +202 2322 5500

JORDANAMMAN-KHELDA, AL KHALIDEEN SUBURB,

AL HAKAM BIN AMRO STREET,

BLDG NO. 22,

P.O. BOX 2564, AMMAN 11953

TEL: +962 6 534 0008

FAX: +962 6 535 7210

MOROCCO65, AVENUE MEHDI BEN BARKA,

SOUISSI, RABAT

TEL: +212 537 287 878

FAX: +212 537 714 165

SOUTH AFRICA7TH FLOOR, 90 GRAYSTON DRIVE,

SANDTON,

JOHANNESBURG, 2196

TEL: +27 11 722 4100

FAX: +27 11 722 4113

SPAINEMPRESARIOS AGRUPADOS,

CALLE MAGALLANES 3,

28015, MADRID

OMANSOUTH LOBBY ROOF TOP, GRAND MALL,

P.O. BOX 163, PC: 136,

AL KHWAIR, MUSCAT

TEL: +968 2 206 3752

FAX: +968 2 206 3753

TURKEYBARBAROS PLAZA, EMIRHAN CADDESI,

NO. 113 KAT. 19, DIKILITAS,

BESIKTAS, ISTANBUL

TEL: +90 212 259 3396

FAX: +90 212 259 3397

VIETNAM11TH FLOOR, BIDV TOWER 194,

TRAN QUANG KHAI ST.,

HOAN KIEM DISTRICT, HANOI

TEL: +84 243 935 2966

FAX: +84 243 935 2969

new delivering long-term value - acwa power · 2020. 7. 24. · and great results. acwa power is a...

Documents