KPMG Professional Services

Roshn Front, Airport Road, P.O. Box 92876, Riyadh 11663, Kingdom of Saudi Arabia

Commercial Registration No 1010425494

Headquarters in Riyadh

Independent limited assurance report

to ACWA Power Company (‘ACWA’) on selected quantitative indicators disclosed in ACWA’s Integrated Annual Report for the year ended 31 December 2023

To the management of ACWA Power Company (ACWA)

We have been engaged by the management of ACWA Power Company (‘the Company’, ‘ACWA’) to carry out a limited assurance engagement in order to state whether anything has come to our attention that causes us to believe that the subject matter information detailed below (‘Subject Matter’), has not been prepared, in all material respects, in accordance with the applicable criteria (‘Applicable Criteria’) as set out below.

Subject Matter

The Subject Matter for our limited assurance engagement were the selected quantitative indicators (‘the Indicators’) as detailed in Annexure 1 of this report, as detailed in ACWA’s 2023 integrated annual report for the year ended 31 December 2023 (‘the Report’), as prepared and presented by the management of the Company.

The Indicators are aggregated based on the reporting boundaries developed by the Company which are detailed in Annexure 1 of this report.

Applicable Criteria

The Applicable Criteria for this limited assurance engagement were the requirements of the relevant established frameworks, as applicable to the Subject Matter, the details of which are mentioned in Annexure 2 of this report.

The Company’s responsibility

The management of the Company is responsible for preparing and presenting the Subject Matter information that is free from material misstatement in accordance with the Applicable Criteria and for the information contained therein.

This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and presentation of the Subject Matter information that is free from material misstatement, whether due to fraud or error. It also includes developing the Applicable Criteria as the criteria against which to evaluate the Subject Matter information.

The management of the Company is also responsible for preventing and detecting fraud and for identifying and ensuring that the Company complies with the laws and regulations applicable to its activities. The management of the Company is responsible for ensuring that staff involved with the preparation of the Subject Matter information are properly trained, systems are properly updated and that any changes in reporting encompass all significant business units.

KPMG Professional Services, a professional closed joint stock company registered in the Kingdom of Saudi Arabia. With the paid‑up capital of (40,000,000) SAR. (Previously known as ‘KPMG Al Fozan & Partners Certified Public Accountants’) A non‑partner member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Our responsibility

Our responsibility is to examine the Subject Matter information prepared by the Company and to report thereon in the form of an independent limited assurance conclusion based on the procedures we have performed and the evidence obtained. We conducted our engagement in accordance with the International Standard on Assurance Engagements (‘ISAE’) 3000 (Revised) Assurance Engagements Other Than Audits or Reviews of Historical Financial Information and ISAE 3410 Assurance Engagements On Greenhouse Gas Statements as endorsed in the Kingdom of Saudi Arabia and the terms and conditions for this engagement as agreed with the Company’s management. ISAE 3000 (Revised) and ISAE 3410 require that we plan and perform the engagement to obtain limited assurance about whether the Subject Matter information has been properly prepared, in all material respects, in accordance with the Applicable Criteria.

Our firm applies the International Standard on Quality Management 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

We have complied with the independence and other ethical requirements of the International Code of Ethics for Professional Accountants (including International Independence Standards) that is endorsed in the Kingdom of Saudi Arabia, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

The procedures selected depend on our understanding of the Subject Matter and other engagement circumstances, and our consideration of areas where material misstatements are likely to arise.

In obtaining an understanding of the Subject Matter information and other engagement circumstances, we have considered the process used to prepare the Subject Matter information in order to design assurance procedures that are appropriate in the circumstances, but not for the purposes of expressing a conclusion as to the effectiveness of the Company’s internal control over the preparation and presentation of the Subject Matter information. A limited assurance engagement in accordance with ISAE 3000 (Revised) and ISAE 3410 involves assessing the risks of material misstatement of the Subject Matter information, whether due to fraud or error, responding to the assessed risks as necessary in the circumstances of the engagement and evaluating the overall presentation of the Subject Matter information.

Our engagement also included: assessing the appropriateness of the Subject Matter, the suitability of the criteria used by the Company in preparing the Subject Matter information in the circumstances of the engagement, evaluating the appropriateness of the procedures used in the preparation of the Subject Matter information and the reasonableness of estimates made by the Company.

Limited assurance is less than absolute assurance and reasonable assurance. The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed.

As part of this engagement, we have not performed any procedures by way of audit, review or verification of the Subject Matter information nor of the underlying records or other sources from which the Subject Matter information was extracted.

Procedures performed

Our limited assurance engagement on the Subject Matter information consisted of making enquiries, primarily of persons responsible for the preparation of the Subject Matter information, and applying analytical and other procedures, as appropriate. These procedures were based on our professional judgement and included the following, amongst others, for the year ended 31 December 2023:

  • Obtaining an understanding of the collection, compilation and reporting processes for the Company, including obtaining an understanding of the internal controls, systems and processes relevant to the preparation of the Subject Matter;
  • Interviewing management and other relevant staff/personnel at corporate and site level responsible for data collection, data management, and data analysis pertaining to the Indicators in scope;
  • Reviewing management documentation and the Company’s data reporting tools to the extent they underpin the preparation of the Subject Matter;
  • Assessing the appropriateness of the conversion factors applied by the Company in arriving at the Indicator’s quantitative data in accordance with the assigned unit of reporting, where applicable;
  • Obtaining inventory data for each selected Indicator, at aggregated corporate level as per the reporting boundary developed by management and agreeing the data with the information detailed in the Subject Matter;
  • Obtaining inventory breakdown data for each selected Indicator, at site level, to select a sample of sites, and performing the following for each selected site in relation to the Indicators, where applicable:
    • Agreeing the site level Indicator’s information to the consolidated data inventory;
    • Obtaining supporting evidence, source data, underlying records, or reports for selected data points to reconcile site level information;
    • Checking aggregation of quantitative data for the Indicators to include all sites in the reporting boundary set by the management;
    • Performing recalculation (where applicable) of the Indicator data of selected site based on site level data obtained from system outputs, reports and other relevant records, and the relevant factors applied; and
  • Performing an analytical review of the Indicator data and trends, where relevant and applicable.
  • Reviewing the sales data to be used for the purpose of computation of intensity indicators.
  • Reviewing the consistency of the qualitative and quantitative information pertaining to the Indicators with the wider Report.

Characteristics and limitations

Due to the inherent limitations of any internal control structure, it is possible that errors or irregularities in the information presented in the Subject Matter may occur and not be detected. The assurance relies on documentation furnished by the Company and interactions with relevant personnel within the Company to validate the self‑assessment. Our engagement is not designed to detect all weaknesses in the internal controls over the preparation of the Subject Matter information as the procedures performed were undertaken on a test basis.

Our engagement was not designed to test, verify or audit the completeness and accuracy of system outputs from the Company.

Furthermore, for the purpose of this limited assurance engagement, we have not performed any procedures around:

  • Checking of the disclosure of the Indicators in reference to any framework or guidance other than what is entailed in the Applicable Criteria, such as for example, Sustainability Accounting Standards Board (‘SASB’), Taskforce for Climate‑ related Financial Disclosures (‘TCFD’), World Economic Forum (‘WEF’), United Nations Global Compact (‘UNGC’) etc.
  • Assessment of the Subject Matter in relation to guidance other than the defined Applicable Criteria, of the established frameworks mentioned in the Annexure 2 of this report.
  • Assessing compliance of other indicators or related information, either qualitative or quantitative, which is not part of the Indicators selected for this engagement, featuring in the Report with the disclosure requirements of any applicable internal or external standards.
  • Assessment of accuracy and completeness of the reporting boundaries determined by the management for the purposes of the Report;
  • Audit, review or verification of the Subject Matter information nor of the underlying records or other sources from which the Subject Matter information was extracted;
  • Assessing the appropriateness of the materiality approach applied by management in preparation of the Report and selection of the material sustainability related Indicators that were subject to limited assurance;
  • Testing effectiveness of and detecting any weaknesses in the internal controls over the preparation of the Subject Matter information as the procedures performed were undertaken on a test basis;
  • Testing, verifying or auditing the completeness and accuracy of system outputs and other data collecting systems used for the compilation of the Subject Matter information;
  • Assessing the completeness and accuracy of the comparative figures that are reported in the Report, including any restatements of comparatives, where applicable;
  • Checking the accuracy of any impact disclosures or performance/progress against the baseline year of 2020 in terms of the Company’s sustainability targets;
  • Ensuring accuracy of the claims or impact assessment or any other data presented by the management in the Report other than the Indicators as mentioned in the Subject Matter information; and
  • Assessing the appropriateness of any GHG emissions that may have been excluded by the Company on materiality grounds, to arrive at quantitative value of total CO2e GHG emissions reported as a part of the Subject Matter, where applicable.

Limited assurance conclusion

Our conclusion has been formed on the basis of, and is subject to, the matters outlined in this report. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.

Based on the procedures performed and the evidence obtained, nothing has come to our attention that causes us to believe that the Subject Matter information is not prepared, in all material respects, in accordance with the Applicable Criteria.

Restriction of use of our report

Our report should not be regarded as suitable to be used or relied on by any party wishing to acquire rights against us other than the Company, for any purpose or in any context. Any party other than the Company who obtains access to our report or a copy thereof and chooses to rely on our report (or any part thereof) will do so at it’s own risk. To the fullest extent permitted by law, we accept or assume no responsibility and deny any liability to any party other than the Company for our work, for this independent limited assurance report, or for the conclusions we have reached.

Our report is released to the Company on the basis that it shall not be copied, referred to or disclosed, in whole (save for the Company’s own internal purposes) or in part, without our prior written consent.


KPMG Professional Services
Fahad Mubark Aldossari

License no: 469

Riyadh, 28 May 2024

Corresponding to: 20 Dhul Qidah 1445H


Annexure 1

Details of the selected quantitative indicators (‘the Indicators’) comprising of the Subject Matter and the reporting boundaries are presented:


Environment

Indicator description Reporting boundary Page number of Integrated Annual Report 2023 where the Indicators are disclosed
1. Greenhouse gas (‘GHG’) (Scope 1 & 2) emissions (equity share basis) Reporting boundary will comprise of all project entities in which ACWA Power has equity shares and the project plant of which has reached full plant commercial operation date. 105
2. CO2 Intensity 102
3. Water withdrawal 115
4. Water discharge 115
5. Water consumption 115

Social (employee wellness)

Indicator description Reporting boundary Page number of Integrated Annual Report 2023 where the Indicators are disclosed
6. Training completed and average training hours Reporting boundary comprises of First National Holding Company (‘NOMAC’), including all its subsidiaries or any entity in which NOMAC holds a majority shareholding, and corporate entities owned by ACWA Power and its subsidiaries. 122 and 124
7. Total Recordable injury & Recordable injury rate 131
8. Fatalities 131

Annexure 2

Details of Applicable Criteria for each selected quantitative Indicator:

# Indicator Category Indicator Relevant Established Framework Calculation formula applicable to the Indicator in scope Relevant section of framework referred to as the Applicable Criteria
1 Environment Equity share of Scope 1 and Scope 2 Greenhouse gas (‘GHG’) emissions GHG Protocol

Scope 1

CO2e emission (fuel 1) (tonnes) = [Sum of CO2 emissions (tonnes) * CO2 GWP] + [Sum of CH4 emissions (tonnes) * CH4 GWP] + [Sum of N20 emissions (tonnes) * N2O GWP]

Scope 2

Scope 2 emissions (tonnes CO2e) = consumed electricity (MWh) x electric grid emission factor for the relative country (tonnes CO2e/MWh)

For Scope 1:

Chapter 6 ‘identifying and calculating GHG Emissions’ on Page 40 to 47 of The Greenhouse Gas Protocol (A Corporate Accounting and Reporting Standard – revised edition)

For Scope 2:

Chapter 6 ‘Calculating Emissions’ Page 43 to 57 of GHG protocol Scope 2 Guidance (An amendment to the GHG Protocol Corporate Standard)

2 Environment CO2 intensity GRI Standard CO2 intensity = Scope 1 + Scope 2 emissions/(gross electricity generation) or (RO water desalination) or (thermal water desalination) Compilation requirement 2.7.1 of Disclosure 305–4 related to ‘GHG emission intensity’ on page 567 of GRI 305 ‘Emission 2016’ of GRI Standards
3 Environment Water Withdrawal GRI Standard NA as absolute value Requirement (a) of Disclosure 303–3 ‘Water withdrawal’ on page 523 of GRI standard 303 ‘Water and Effluents 2018’
4 Environment Water Discharge GRI Standard NA as absolute value Requirement (a) of Disclosure 303–4 ‘Water discharge’ page 523 of GRI standard 303 ‘Water and Effluents 2018’
5 Environment Water Consumption GRI Standard

Water Consumption (m3) =

[water withdrawal (m3)] – [water discharged (m3)]

(Aligned with guidance of disclosure in GRI 303–5)

Guidance for Disclosure 303–5 ‘Water consumption’ page 528 of GRI standard 303 ‘Water and Effluents 2018’
6 Social (Employee Wellness) Training completed and average training hours per employee GRI Standard Average training hours per employee = Total numbers of training hours provided to employees/total number of employees Guidance for Disclosure 404–1 ‘Average hours of training per year per employee’ on page 694 of GRI standard 404 ‘Training and Education 2016’
7 Social (Employee Wellness) Recordable injury rate (Case injury rate) and lost time injury rates Occupational Safety and Health Administration (‘OSHA’) Standard

Recordable Injury Rate (RIR) = Recordable work‑related injuries/Numbers of work hours × 200,000

Lost Time Injury (LTI) Rate = LTI/Numbers of work hours × 200,000

[LTI equates to days away from work]

Standard Number 1904.7 ‘General Recording Criteria’ of Part number 1904 ‘Recording and Reporting Occupational Injuries and Illnesses’ of OSHA Standard provided on following website link:

1904.7 – General recording criteria. | Occupational Safety and Health Administration (osha.gov)

Formula of Recordable injury rate and Lost time injury is based on standard interpretation ‘Clarification on how the formula is used by OSHA to calculate incident rates’ provided on following website link:

Clarification on how the formula is used by OSHA to calculate incident rates | Occupational Safety and Health Administration
8 Social (Employee Wellness) Fatalities OSHA Standard NA as absolute value

Clause 1904.7 (b)(2) of Standard Number 1904.7 ‘General Recording Criteria’ of Part number 1904 ‘Recording and Reporting Occupational Injuries and Illnesses’ of OSHA Standard provided on following website link:

1904.7 – General recording criteria. | Occupational Safety and Health Administration (osha.gov)