The International Finance Corporation (IFC) has provided a US$240m Islamic Equity Bridge Loan (EBL) financing for ACWA Power to support the development of Uzbekistan’s renewable energy sector.
IFC’s funding will support the construction and operation of two projects, a 1GW solar plant and a 668MW battery energy storage system (BESS), along with approximately 500km of high-voltage transmission lines.
The financing is structured as an Islamic Finance Murabaha, comprising an A-Loan of up to US$227.75m and a US$12.25m trust loan through IFC’s Managed Co-Lending Portfolio Program.
The money will support ACWA Power’s equity contributions to the project’s development over the next four years.
This investment instrument is widely used to help project developers offer competitive tariffs by optimising equity returns, IFC said.
The facility will enable ACWA Power to mobilise additional capital and attract private sector investors, contributing to Uzbekistan’s target of achieving 40% renewable energy generation by 2030, it added.
ACWA Power chief financial officer Abdulhameed Al Muhaidib said: “IFC’s strategic partnership with ACWA Power underscores the robust confidence that multilateral development finance institutions have in our credit standing and Saudi Arabian corporates in general.
“This watershed transaction will anchor ACWA Power’s ongoing energy transition drive to renewable energy in critical frontier markets like Uzbekistan, and in turn solidifies our status as a global leader in sustainable energy.
“We are honored to collaborate with IFC on this transformative project in Uzbekistan, which embodies our shared vision of advancing sustainable energy solutions.
“This initiative is set to establish a new standard for cross-border ACWA Power recourse funding support, and in turn effectively addressing energy demands while championing environmental sustainability.”
IFC’s regional head of industry for infrastructure and natural resources in the Middle East, Central Asia, Türkiye, Afghanistan and Pakistan Laura Vecvagare said: “This project reflects IFC’s commitment to tackling climate change, accelerating the clean energy transition in emerging markets, and supporting public and private sector entities in Saudi Arabia with innovative investments in the region and beyond.
“As we deepen our partnership with ACWA Power, we continue to build on our track record of mobilising South-South investments that drive sustainable development in emerging markets while supporting countries like Uzbekistan in their renewable energy journey.”
Additionally, the project will promote gender inclusivity by increasing the representation of women in ACWA Power’s workforce and fostering a gender-inclusive workplace, IFC said.