March 5, 2018 / 11:03 AM / 10 months ago

Saudi ACWA Power picks JPMorgan, Citi for IPO: sources

DUBAI (Reuters) - Saudi Arabia’s ACWA Power IPO-ACPO.SE has selected JPMorgan (JPM.N) and Citigroup (C.N) to arrange the initial public offering of its shares, which could raise up to $1 billion, sources said.

FILE PHOTO: Paddy Padmanathan, CEO of Acwa Power, uses a computer in his office in Riyadh, Saudi Arabia, February 11, 2018. REUTERS/Reem Shamseddine

The two are among the international banks chosen as global coordinators, sources told Reuters.

French investment bank Natixis and Saudi firm Riyad Capital are also among the banks chosen to help the IPO, two sources said.

ACWA Power, a developer of electricity and water projects in the Middle East, Africa and southeast Asia, is looking to sell a 30 percent stake to investors and list in Riyadh, banking sources have told Reuters.

An IPO is expected by the end of the year.

ACWA and Citigroup declined to comment and the other banks did not immediately respond to Reuters requests for comments.

The sources declined to be identified because the information is not public.

The firm could become one of the main beneficiaries of Saudi Arabia’s effort to develop its power industry, particularly renewable energy.

ACWA’s CEO told Reuters last month that it expects to submit tenders for projects this year worth $4.5 billion in Saudi Arabia and will also target projects in Morocco and the United Arab Emirates.

Saudi Arabia wants to diversify its energy mix by using renewables, for example, and by partnering with the private sector. The ministry of energy’s government renewable office plans to tender 3,200 megawatt (MW) of solar photovoltaic projects and 800 MW of wind projects.

According to its own figures, ACWA Power’s portfolio generates more than 22 gigawatts of power, with investments valued at over $30 billion.

ACWA has close relations with the Saudi government, with the country’s top sovereign wealth fund, the Public Investment Fund, owning 13.7 percent indirectly through a subsidiary.

In November 2016, the Public Investment Fund hired HSBC (HSBA.L) to advise it on a potential purchase of an increased stake in ACWA.

Additional reporting by Katie Paul and Davide Barbuscia, editing by Louise Heavens

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