ACWA Power: Comprehensive Analysis of Its Performance in Saudi Stock Market

ACWA Power was established in 2004 under the name "Arab Company for Water and Power" and is headquartered in Riyadh. From its early days, the company focused on developing vital infrastructure projects in the fields of energy and water, aiming to meet the Kingdom's growing needs for electricity and desalinated water. Over time, the company's activities expanded to include international projects in Africa and Asia, diversifying its portfolio to include plants powered by conventional fuels, as well as those relying on solar and wind energy, in addition to advanced desalination projects. ACWA Power's listing on the Saudi financial market provided it with additional momentum, allowing it to access a broader base of investors and raise substantial funding to support its expansion plans. Today, ACWA Power is considered a leading company in the energy and water sector, playing a crucial role in achieving the goals of Saudi Vision 2030 regarding clean energy and sustainability.

ACWA Power operates in three main areas: conventional electricity generation, renewable energy projects, and water desalination. In the electricity sector, the company manages gas and fossil fuel plants to meet industrial and residential demand. In the renewable energy sector, ACWA Power has emerged as a leading developer of large solar power plants and wind energy projects both within and outside the Kingdom. These investments contribute to supporting Saudi Arabia's transition towards more sustainable energy sources. In the water sector, the company operates major desalination plants using various technologies, including reverse osmosis and multi-stage flash, making it a key player in securing the Kingdom's water needs. This diversification supports ACWA Power's ability to achieve stable revenues from long-term contracts with government entities and provides flexibility in facing regulatory and market shifts.

ACWA Power is listed on the Saudi financial market under the symbol (2082) and falls within the Utilities sector, making it one of the leading stocks in the general index (TASI). The listing has contributed to increasing the company's transparency through its commitment to periodic disclosure of its financial results, opening the door for individual and institutional investors to participate in its future growth. ACWA Power's stock is considered one of the active and liquid stocks in the Saudi market, especially with the rising demand for companies focusing on renewable energy and infrastructure projects. Additionally, the expansion and diversification of its shareholder base reflect market confidence in the company's strategy and its ability to execute large projects both locally and internationally.

Recent financial data indicates strong performance for ACWA Power during 2024 and 2025. The stock price in mid-2025 is approximately 70–80 Saudi Riyals, with a market capitalization estimated in the billions of Riyals, exceeding 35-40 billion Riyals assuming a share count of around 500 million. The company recorded an annual net profit in 2024 of 1.75 billion Riyals, reflecting an annual increase of about 6% compared to 2023. The first quarter of 2025 saw a jump in net profit to 427.2 million Riyals, growing 44% compared to the same period last year. The price-to-earnings (P/E) ratio is around 25, while the cash dividend yield stands at 3–4% according to the annual policy. These figures indicate a rapid growth pace supported by the commissioning of new projects and rising operational revenues.

ACWA Power has demonstrated a commitment to regular financial disclosure, providing investors with a clear view of its performance. In the fourth quarter of 2024, the company recorded a net profit of 502.2 million Riyals, while the annual net profit reached 1.75 billion Riyals. For the first half of 2024, it reported earnings of 926.8 million Riyals, up 36% from the same period the previous year. In the first nine months of 2024, net profit reached 1.25 billion Riyals. This growth is partly attributed to the operation of new plants and increased efficiency of existing plants, along with improved returns from long-term contracts. The financial results are evidence of the company's resilience in adapting to market changes and achieving sustainable profitability.

Renewable energy is a strategic focus for ACWA Power, which has invested significantly in solar and wind energy projects in recent years. This aligns with the Kingdom's direction to reduce dependence on oil and increase the share of clean energy in the national energy mix. The company has signed several major agreements to develop solar and wind power plants, establishing a notable presence in projects such as the Shuqaiq solar plant. ACWA Power's expansion in this sector is not limited to Saudi Arabia but extends to countries such as Morocco, South Africa, and Malaysia, where it seeks to implement large-scale projects with high production capacity. This approach enhances the company's position as a leader in the transition to sustainable energy at both local and global levels.

The water desalination sector is a vital area of focus for ACWA Power, given the strategic importance of water in the Kingdom and the region. The company operates several desalination plants utilizing modern technologies such as reverse osmosis (RO) and multi-stage flash (MSF), enabling it to provide substantial quantities of fresh water for both the population and industry. Long-term sales contracts with government entities contribute to stabilizing revenues in this sector. Additionally, the company invests in developing innovative solutions to improve energy efficiency in desalination plants, positively impacting profit margins and environmental sustainability.

ACWA Power's ambitions are not limited to the Saudi market but extend to emerging and advanced markets in Asia and Africa. The company has signed memorandums of understanding and agreements with government entities in Malaysia to develop renewable energy projects with a capacity of up to 12.5 gigawatts by 2040. It has also entered into wind energy projects in Uzbekistan, where two wind plants are set to begin commercial operation in the second half of 2024. These geographic expansions provide ACWA Power with income diversification and reduce risks associated with reliance on a single market, while also supporting its reputation as a regional and international developer of clean energy.

ACWA Power faces strong competition from several local and international companies. At the forefront of local competitors is the Saudi Electricity Company (SEC), which dominates the electricity generation and transmission sector in the Kingdom. Additionally, the National Water Company participates in desalination and water distribution projects. There are also companies such as Marafiq and Tabreed, as well as independent power producers and international developers competing for government tenders in renewable energy projects. Nevertheless, ACWA Power remains ahead in terms of project size and diversity, especially in the renewable energy sector, giving it a competitive advantage in the market.

In recent years, ACWA Power has witnessed a series of significant developments. In June 2024, it announced the signing of three agreements for solar energy projects with a total value of 12.3 billion Riyals, enhancing its position in the sector. The company also experienced international expansion through partnerships in Malaysia and Uzbekistan. In terms of financing, it announced in June 2025 its intention to raise approximately 7.1 billion Riyals through a rights issue to support its expansion plans. In the innovation aspect, ACWA Power is investing in new technologies such as green hydrogen and energy storage, keeping pace with global trends in sustainable energy. These developments reflect the company's commitment to updating its investment portfolio and seizing future growth opportunities.

The energy and utilities sector is a vital area in the Kingdom of Saudi Arabia and is experiencing significant momentum due to the government's direction towards economic diversification and renewable energy. Initiatives under Vision 2030 have contributed to enhancing investments in solar and wind energy, with substantial budgets allocated for this sector. The sector is also witnessing increasing competition among local and international companies, especially with supportive regulatory policies for the private sector. ACWA Power focuses on leveraging this positive climate by entering into large projects and long-term contracts, providing it with revenue stability. Conversely, companies face challenges such as fluctuating energy prices, regulatory changes, and increasing competition for government tenders.

ACWA Power's stock has shown significant growth in recent years, with the stock price increasing by approximately 28.1% over one year and rising by about 246.6% over five years. This performance reflects investor confidence in the company's strategy and its ability to achieve sustainable growth. The stock is actively traded and attractive to liquidity, especially with investor interest in renewable energy and infrastructure sectors. However, it is important to note that stock prices are subject to market fluctuations and future trends cannot be accurately predicted.

ACWA Power enjoys strong growth opportunities supported by the increasing demand for clean energy and water in Saudi Arabia and the region. Government support for renewable energy projects, the company's expansion into foreign markets, and its investment in innovative technologies such as green hydrogen are all factors supporting the sustainability of its operations. Conversely, the company faces challenges such as fierce competition for tenders, regulatory changes, and fluctuations in energy and raw material prices. Additionally, reliance on long-term contracts with government entities exposes it to risks associated with changes in policies and financial support. It is essential to continuously monitor market developments and the regulatory environment to ensure ongoing growth.

In June 2025, ACWA Power announced plans to raise additional funding of 7.1 billion Saudi Riyals through a rights issue, aimed at supporting the company's expansion plans in renewable energy projects both domestically and internationally. This move is part of the company's strategy to maintain its strong financial position and ensure liquidity for financing new projects. The fundraising through rights issues may temporarily affect the stock price due to an increase in the number of outstanding shares, but it often enhances the company's ability to execute its long-term expansion plans.