In a strategic move reflecting the global leadership of Saudi companies in the energy and water sector, ACWA Power announced the signing of a pivotal public-private partnership agreement to implement an integrated project for the design, construction, financing, operation, and maintenance of a seawater desalination plant in the Republic of Azerbaijan. The agreement was signed with the Government of Azerbaijan, represented by the State Water Resources Agency, to establish the project company, "Caspian Sea Azerbaijan Project Company.".
Agreement and Investment Details
According to a statement published on the Saudi Stock Exchange (Tadawul) website on Sunday, the agreement, signed on December 26, represents an investment of approximately US$400 million (equivalent to SAR 1.5 billion). The contract extends for a long period of 27.5 years, encompassing both the construction and operation phases, reflecting a long-term commitment to developing the region's water infrastructure.
ACWA Power explained that this project represents a milestone as it will witness the implementation of the first seawater desalination plant using the reverse osmosis (SWRO) system on a large scale in the Caspian Sea, where the Saudi company owns a full 100% stake in the project, which confirms its great confidence in the Azerbaijani market and its ability to manage major projects independently.
Strategic importance and regional context
This project comes at a time of increasing global need for sustainable water sources, particularly in the Caspian Sea region. This is especially important for Azerbaijan, which is striving to diversify its drinking water sources and reduce its reliance on traditional sources in the face of climate change. The reverse osmosis technology that ACWA Power will utilize is among the most energy-efficient and cost-effective technologies, thus supporting the host country's environmental and economic sustainability goals.
Strengthening Saudi-Azerbaijani economic relations
The impact of this project extends beyond the technical and service aspects, serving as tangible evidence of the deepening economic ties between the Kingdom of Saudi Arabia and the Republic of Azerbaijan. ACWA Power's presence in Azerbaijan is an extension of the company's strategy to expand into Central Asian markets, aligning with the Kingdom's Vision 2030, which encourages major national companies to export their expertise and lead vital infrastructure projects worldwide.
Expected financial impact
Regarding the financial impact, the company indicated that the reflection of contracted revenues will begin after the Early Commercial Operations Date (ECOD), which will be announced precisely upon reaching financial closure for the project. This project reinforces ACWA Power's position as the world's largest privately owned desalination company and a key driver of transformation in the energy and water sectors.
