RIYADH: Saudi utility giant ACWA Power has signed a public-private partnership agreement valued at SR1.5 billion ($400 million) to develop Azerbaijan’s first large-scale Caspian Sea water reverse osmosis desalination plant. 

In a Tadawul statement, ACWA Power said the agreement was signed with the government of Azerbaijan, represented by the Azerbaijan State Water Resources Agency as the public partner, and Caspian Sea Azerbaijan Project Co. in its capacity as the project company. 

The development aligns with ACWA Power’s expansion strategy as it seeks to establish itself as a key global player in renewable energy, water desalination, and green hydrogen through a growing portfolio of large-scale projects at home and abroad. 

In the Tadawul statement, ACWA Power stated: “The Public Private Partnership Agreement along with a series of agreements were signed to deliver Azerbaijan’s first large-scale Caspian Sea Water Reverse Osmosis Desalination Plant.”  

According to the statement, the contract term spans 27.5 years, including the construction period. 

The agreement covers the design, engineering, construction, financing, ownership, operation, and maintenance of the desalination plant, with ACWA Power holding a 100 percent shareholding in the project company. 

The financial impact of the contracted revenues is expected to be reflected after the early commercial operation date, which will be announced at the time of financial close. The company added that no related parties are involved in the transaction. 

Earlier this month, ACWA Power signed a cooperation framework agreement with the African Development Bank to enhance collaboration on power generation and water desalination projects across Africa. 

Under the agreement, the two parties will work together to identify, develop, and finance sustainable energy and water initiatives, with a target investment of up to $5 billion between 2025 and 2030. 

In December, ACWA Power also completed the refinancing of the Rabigh 3 Independent Water Project in Saudi Arabia’s western region. 

Rabigh 3 is a seawater desalination plant with a capacity of 600,000 cubic meters of potable water per day, using reverse osmosis technology. 

The company said the refinancing was executed through a capital-markets-led approach, anchored by the issuance of a long-term senior secured project bond.