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Saudi Arabian company ACWA Power International has announced that it has entered into a binding agreement with Jordan Dubai Capital to acquire a controlling stake in Jordan’s Central Electricity Generation Company (CEGCO), valued at around $144 million.
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ACWA Power is a specialist in developing privately owned and financed power generation and desalinated water production plants. It has established a strong presence in the Kingdom, but has plans to expand into a regional market since its 2010 acquisition of the Barka 1 IWPP in Oman.
“This acquisition is a culmination of a longstanding endeavour to establish a presence in Jordan and contribute to increasing Jordan’s electricity generation capacity to keep pace with its rapidly growing demand, all the while also being mindful of utilising the scarce fuel resources in the most efficient manner possible,” Mohammed Abunayyan, chairman of ACWA Power, said in a statement.
CEGCO is the largest power generator in Jordan. It controls seven power generation plants nationwide, totalling 1700 MW of installed power capacity.
The company has a varied portfolio of technology and fuel types, which meets around 59 per cent of the country’s current electricity consumption.
The company is held under a majority ownership of 51 per cent by Enara Energy Investments. Jordan Dubai Capital also owns a 65 per cent stake in Enara, and it is this stake that ACWA will acquire from Jordan Dubai Capital.
CEGCO will continue to be divided in an ownership scheme that sees 40 per cent of the company owned by the Jordanian government, the Social Security Corporation of Jordan owning 9 per cent, while Enara possesses the remaining 51 per cent.
Paddy Padmanathan, president and CEO of ACWA Power, said that in order to sustain the rapid pace of socio-economic development in Jordan, power generation capacity needed to double. He added that the energy company’s prime objective was to keep its focus on reducing the cost of power production and desalinated water.
In line with these objectives, Padmanathan said that the company would continue to support the government’s initiatives to improve efficiency, diversify fuel sources to include renewable energy and expand capacity.
“ACWA Power will leverage on its own capability, capacity and credibility to help the Jordanian government in spurring and sustaining the development of the Kingdom as envisaged in their 2020 energy strategy,” he explained.