Further disclosures

Remuneration

Remuneration Policy of the Board Directors, Board committees and Executive Management

In line with article (59) of the CGR issued by the CGR, the Company’s Remuneration Policy of the Board of Directors, Board committees and Executive Management (the ‘Remuneration Policy’) has been developed and approved by the ordinary General Assembly, pursuant to the recommendation of the NRC and endorsement of the Board of Directors. The Remuneration Policy sets the amounts, rules and guidelines in which members of the Board of Directors, Board committees and Executive Management are to be remunerated with the aim of attracting and retaining the best talent to achieve the success of the Company and its long‑term objective and mission while taking into consideration the Company’s business environment.

General Remuneration Framework

As a general rule, any Remuneration payable by the Company to a member of the Board of Directors, Board committees and Executive Management must be in line with Applicable Legislation and shall be determined with the view of achieving the following objectives:

• to achieve the long‑term success and development of the Company in line with its approved strategy and objectives;
• to be consistent with the size, nature and level of risks associated with the Company, and be within the boundaries of the Board’s approved risk appetite for the Company;
• to meet the interests of the Company’s shareholders;
• to ensure that the Remuneration is justifiable and is within the market benchmark of companies in similar sectors;
• to ensure coordination within the NRC in respect of future appointments;
• to ensure and maintain fairness and equality in terms of job level, duties and responsibilities, educational and professional qualifications, practical experience, skills and level of performance; and
• to reasonably incentivise and retain a talented workforce necessary for the Company to achieve its business goals.

The Company should also take into account the general criteria set out under the the CGR issued by the CMA and other Applicable Legislation relating to payment of Remuneration to Directors, which include:

• The Remuneration must be fair and proportionate to the Director’s activities carried out and responsibilities assumed, in addition to the objectives set out by the Board to be achieved during the financial year;
• The Remuneration must be based on the recommendation of the NRC, for the endorsement of the Board and approval of the General Assembly;
• The level and composition of Remuneration should be sufficient and reasonable to attract and retain talented individuals to fill their respective roles;
• The Remuneration payable to Directors shall not be a percentage of the profits achieved by the Company nor be based on the profitability of the Company; and
• The Remuneration plans, policies or programmes, that must not be excessive in terms of what is standard practice, or which does not comply with the standards and rules set by the regulatory bodies in the Kingdom.

During the year, the remunerations paid to the Board of Directors, the Board Committee members and Executive Management as indicated in this report are in compliance with the Remuneration Policy.

Remuneration of the Board Directors as per the Remuneration Policy

1. Each Board member shall be paid a lump‑sum amount of SAR 350,000 per year in consideration of his/her position as a Board member and his/her contribution to the Board’s activities. The Board may propose, following a recommendation from the NRC, to amend this lump‑sum amount subject to obtaining the General Assembly’s approval.
2. Each Board member shall also be paid an amount of SAR 3,000 as an attendance fee per Board meeting, whether attended in person or through any remote channel. Board members delegating a proxy will not be entitled to receive this attendance fee.
3. Save as mentioned under point 5 opposite, the aggregate annual Remuneration payable to any Director shall not exceed the capped amount of SAR 500,000 per year as set formerly by the regulatory bodies in the Kingdom, and which may be amended from time‑to‑time.
4. The Company will reimburse the actual reasonable expenses incurred by a Director for attending Board and/or Board Committee meetings, including travel and accommodation expenses, in accordance with the Company’s approved internal Travel and Expense Policy of the Members of the Board of Directors and Board committees.
5. A Director may receive additional Remuneration for his/her membership in the Board Audit Committee, any executive, technical, administrative or advisory work assigned to him/her independently by the Company.
6. At any given time, Board members shall not participate in discussions pertaining to their own Remuneration.
7. Board members may not vote on agenda item(s) relating to their Remuneration at the General Assembly meetings.

Paid remuneration and incurred expenses of the Board during the Year

The Board of Directors received a total remuneration, inclusive of fixed and variable remuneration, in their capacity as members of the Board of Directors and Board committees (if applicable) of SAR 3,511,294 for the year 2023.

Remuneration of the members of the Board committees

Without prejudice to Article 59(2) of the Corporate Governance Regulations which provides for the General Assembly to issue, upon a recommendation of the Board, a regulation which determines the remuneration of the Board Audit Committee:

1. Each Board Committee member will be paid an annual lump‑sum amount as recommended by the NRC and approved by the Board for each Committee he/she is a member of. The specific lump‑sum amounts to be paid to the Board Committee members is as follows:
   1. Audit Committee: SAR 175,000 per year
   2. Executive Committee: SAR 175,000 per year
   3. Risk Management Committee: SAR 150,000 per year
   4. Nomination and Remuneration Committee: SAR 150,000 per year
2. Each Board member who also serves as a member in any Board Committee shall receive a lump‑sum amount in addition to the amounts he/she receives for his/her position as a Board Director or for any executive, technical, administrative or advisory work, assigned to him/her by the Company, considering the SAR 500,000 (with the exception of the members of the Board Audit Committee);
3. Each Board Committee member shall also be paid an amount of SAR 3,000 as an attendance fee per Board Committee meeting, whether attended in person or through any remote channel. The same amount is payable to any Director, who is not a Board Committee member, but who has been requested to participate at a Committee meeting, in accordance with the CGR. Committee members delegating a proxy will not be entitled to receive this attendance fee.

1. The Remuneration payable to members of the Executive Management shall be recommended by the NRC and approved by the Board in accordance with the relevant employment contracts and internal policies.
2. The nature and classes of benefits applicable to the Executive Management, as well as the KPIs used to determine and recommend their Remuneration, shall be periodically reviewed by the NRC and approved by the Board.
3. The Company may offer the Executive Management variable Remuneration that is market‑informed and subject to the fulfilment of pre‑defined performance goals, whether short‑term or long‑term.
4. Such variable Remuneration plans shall be subject to the recommendation/endorsement of the NRC and the approval of the Board.

Senior Executives’ Remuneration during the Year 2023

The aggregate remuneration paid to the Company’s five highest paid Senior executives (including the MD, CEO and CFO) including salaries, benefits and allowances during the year 2023 are set out in the table opposite.

Declarations based on the Corporate Governance Regulations (‘CGR’) issued by the Capital market Authority (‘CMA’) of the Kingdom of Saudi Arabia

Non‑implemented provisions of the CGR

The Company has implemented all applicable mandatory provisions contained in the Corporate Governance Regulations issued by the CMA, except the provisions noted below. As at 31 December 2023, it is anticipated the CGR will be subject to further amendments as a result of the issuance of the new Companies Law which may impact the following provisions:

Declarations on the non‑applicable provisions that must be mentioned under Article 87 of the CGR:

The Board of Directors of the Company declare the following:

• Article 87 (9): there are no punishments, penalty, precautionary procedure or preventive measure imposed on the Company by the Authority or any other supervisory, regulatory or judiciary authority.
• Article 87 (12): there are no recommendations of the BAC, which is conflicted with the Board’s decisions, or which the Board has refused to take on the appointment and removal of the Company’s auditor, the determination of its fees, the evaluation of its performance or the appointment of the internal auditor, the reasons for those recommendations, and the reasons for not adopting them.
• Article 87 (21): there is no inconsistency with the standards approved by the Saudi Organisations for Certified Public Accountant ‘SOCPA’.
• Article 87 (25): there is no interest in a class of voting shares held by persons (other than the Company’s Directors, Senior Executives and their relatives) who have notified the Company of their holdings pursuant to Article 85 of the Rules on the Offer of Securities and Continuing Obligations.
• Article 87 (26): there are no interests, contractual securities or rights issue of the Board members, Senior Executives and their relatives on shares or debt instruments of the Company or its affiliates.
• Article 87 (28): there are no convertible debt instruments, contractual securities, pre‑emptive right or similar rights issued or granted by the Company during the fiscal year 2021.
• Article 87 (29): there are no conversions or subscription rights under any convertible debt instruments, contractually based securities, warrants or similar rights issued or granted by the Company.
• Article 87 (30): there is no redemption, purchase or cancellation by the Company of any redeemable debt instruments.
• Article 87 (35): there is no arrangement or agreement under which a Director or a senior Executive of the Company has waived any remuneration.
• Article 87 (36): there is no arrangement or agreement under which a shareholder of the Company has waived any rights to dividends.
• Article 87 (38): there are no investments made or any reserves set up for the benefit of the employees of the Company as at 31 December 2023.
• Article 87 (40): the External Auditor’s report for the year ended 31 December 2023, did not contain any reservations on the financial statements of the Company for the year then ended.
• Article 87 (41): there was no recommendation to replace the external auditor before the end of its term.

The Board of Directors of the Company hereby declares that:

• The accounting records were properly prepared;
• The system of internal control is sound in design and has been effectively implemented; and
• There are no doubts on the Company’s ability to continue business.

Related Party transactions including those which a Director of the Company, a Senior Executive or any person related to any of them is or was interested

The Company enters into a number of related party transactions to support its ordinary course of business as it pertains to its field and industry. All related party contracts are on an arm’s‑length basis and contain no preferential terms and conditions.

During the course of 2023 the Company entered into a total of eight (8) transactions of which seven (7) are related party transactions for ACWA Power. The supporting documents for each transaction were meticulously examined. All the Related Party Transactions were formally presented to the BAC for thorough assessment and subsequent approval.

In order to maintain full transparency with respect to such transactions, the Company is listing related party transactions of 2023Transactions entered into between First National Holding Company (NOMAC), a 100%‑owned subsidiary, and related parties of the Company are not included in this report. as set out below:

Agreements and Transactions with Toray Membrane Middle East LLC (‘TORAY’)

Transaction#1: The business and contracts concluded between the Company and Toray Membrane Middle East LLC (‘TORAY’), in which the Chairman of the Board of Directors, Mr Mohammad Abdullah Abunayyan, has an indirect interest. These businesses and contracts include the signing of a memorandum of understanding (‘MoU’) for joint research on energy operation and provision techniques for one of the factories of the Company’s subsidiary projects. There are no preferential terms in these businesses and contracts. These business and contracts are considered a transaction with a related party.

Agreements and Transactions with Saudi National Bank

Transaction#2: The business and contracts concluded between the Company and Saudi National Bank (‘SNB’), in which the member of the Board of Directors, Mr Abdullah Al‑Rowais, has an indirect interest. These businesses and contracts include financing for the construction and development of a water desalination plant owned by the Company, with an amount of 250,000,000 (two hundred and fifty million) US dollars. This Consortium of local and international banks (Standard Chartered Bank, Saudi National Bank, Riyad Bank, Saudi Investment Bank, and Bank of China), with limited to ACWA Power equity commitment, and the financing period is up to 27 years and five months. There are no preferential terms in these businesses and contracts. These businesses and contracts are considered a transaction with a related party.

Transaction#3: The business and contracts concluded between the Company and Saudi National Bank (‘SNB’) in which the member of the Board of Directors, Mr Abdullah Al‑Rowais, has an indirect interest. These businesses and contracts include a long‑term financing consortium to one of the Company’s subsidiary projects, with an amount of 330,000,000 (three hundred thirty million) US dollars. This consortium includes local, regional, and international banks (Banque Saudi Fransi, First Abu Dhabi Bank, Mizuho Bank, Riyad Bank, Saudi National Bank, Standard Chartered Bank, and Saudi Investment Bank). The financing period is 32 years and nine months. There are no preferential terms in these businesses and contracts. These business and contracts are considered a transaction with a related party.

Transaction#4: The business and contracts concluded between the Company and Saudi National Bank (‘SNB’) in which the member of the Board of Directors, Mr Abdullah Al‑Rowais, has an indirect interest. These businesses and contracts include providing a corporate guarantee (parent company guarantee) to (‘SNB’) to support the Equity Bridge Loan (‘EBL’) facility provided to the company’s subsidiary projects, with an amount of 100,000,000.00 (one hundred million) US dollars. The period of the Equity Bridge Loan is 7 years. There are no preferential terms in these businesses and contracts. These business and contracts are considered a transaction with a related party.

Transaction#5: The business and contracts concluded between the Company and Saudi National Bank (‘SNB’) in which the member of the Board of Directors, Mr Abdullah Al‑Rowais, has an indirect interest. These businesses and contracts include an investment in the issuance of ACWA Power Sukuk in its second phase, with an amount of 150,000,000 one hundred and fifty million Saudi Riyals. The investment period is 7 years. There are no preferential terms in these businesses and contracts. These business and contracts are considered a transaction with a related party.

Agreements and Transactions with Al Rajhi Bank

Transaction#6: The business and contracts concluded between the Company and Al Rajhi Bank in which the member of the Board of Directors, Dr Ibrahim Al Rajhi, has an indirect interest. These businesses and contracts include an investment in the issuance of ACWA Power Sukuk in its second phase, with an amount of 360,000,000 (three hundred and sixty million) Saudi Riyals. There are no preferential terms in these businesses and contracts.

Agreements and Transactions with Water and Environment Technologies Company (‘WETIC’)

Transaction#7: The business and contracts concluded between the Company and Water and Environment Technologies Company (‘WETIC’), in which the Chairman of the Board of Directors, Mr Mohammad Abdullah Abunayyan, has an indirect interest. These businesses and contracts include the signing of a service agreement for one of the Company’s subsidiary projects, with an amount of 10,000,000 (ten million) US dollars. There are no preferential terms in these businesses and contracts. These business and contracts are considered a transaction with a related party.

Agreements and Transactions with Regional Voluntary Carbon Market Company

Transaction#8: The business and contracts concluded and will be concluded between the Regional Voluntary Carbon Market Company – an affiliate of the Public Investment Fund (‘PIF’) in which the member of the Board of Directors, Mr Fahad Al‑Saif, and the member of the Board of Directors, Mr Omar Al‑Madi, have an Indirect interest. These businesses and contracts include the signing of a carbon credit purchase agreement with an amount of 373,952.80 (three hundred and seventy‑three thousand nine hundred and fifty‑two US dollars and eighty cents). There are no preferential terms in these businesses and contracts. These business and contracts are considered a transaction with a related party.

Competing business with the Company or any of its activities that a member of the Board is/was engaging in

There was no competing interest reported during the year 2023.

Shareholders

Ownership

As at 31 December 2023, the Company had issued and paid‑up share capital of SAR 7,310,997,290 consisting of 731,099,729 shares of SAR 10 par value per share. Below are the substantial shareholders of the Company as at 31 December 2023, with an ownership of 5% or more of the issued shares:

Ownership of Board members and Senior Executives

Below illustrates shares of the Company held by Board members as at 31 December 2023 and any changes to their holding during 2023. There were no arrangements by which any of the Board members waived any salary compensation.

General Assembly Meetings

During the year 2023, the Company held two (2) General Assembly meetings. All meetings were attended by the Chairman and members of the Board of Directors, with absentees as noted in the table below.

Dividend Policy

Pursuant to Article 9(c) of the CGR, each Shareholder acquires the rights attached to the Company’s Shares, including the right to receive a portion of the dividends declared. The declaration and payment of any dividends will be recommended by the Board before being approved by the shareholders at a General Assembly meeting. The Company is under no obligation to declare a dividend and any decision to do so will depend on, amongst other things, the Company’s historic and anticipated earnings and cash flow, financing and capital requirements, market and general economic conditions, the Company’s zakat position as well as legal and regulatory considerations. The distribution of dividends is subject to restrictions under financing agreements and any other project agreements to which the Company is a party from time‑to‑time (noting that as at 31 December 2023, there are no restrictions on the distribution of dividends according to the agreements entered by the Company), as well as certain limitations contained in the By‑laws (please refer company website for the By‑laws). If declared, dividends will be paid in Saudi Riyals.

According to Article 51 of the By‑laws, the Company’s annual net profits shall be allocated, after deducting all general expenses and other costs, and after setting aside the reserves necessary to cover the investment losses and obligations, as deemed necessary by the Board, as follows:

• zakat amounts payable by the Shareholders will be calculated and paid by the Company to the relevant authorities;
• following the zakat deductions, 10% will be set aside for the statutory reserve, provided that the General Assembly may stop such allocation once the statutory reserve reaches 30% of the Company’s paid‑up share capital;
• the General Assembly may, upon the Board’s recommendation, set aside 1% of the net profits for the Company’s voluntary reserve(s) established for specific purposes;
• the General Assembly may establish other reserves provided it is in the interest of the Company or it guarantees to the extent possible distribution of fixed dividends to the Shareholders. The General Assembly may also set aside certain amounts to establish or contribute to social union corporations for the Company’s employees;
• following the above, dividends will be distributed to the Shareholders in an amount not less than 1% of the Company’s paid‑up share capital. Also, the General Assembly may, upon the Board’s recommendation and as it sees fit, distribute further dividends; and
• if the Company suffers losses, such losses may be carried forward to the following financial year and no profits shall be distributed until the losses are completely recovered.

For 2023, the Board of Directors resolved to recommend to the General Assembly cash distribution of SAR 0.45 per share and non‑cash bonus share distributions of 1 share for every 500 shares owned. The hybrid distribution took into consideration the Company’s position in optimising its cash utilisation for growth.

On 28 February 2024, the Board of Directors approved a dividend payment of SAR 329.0 million (SAR 0.45 per share) for the year 2023, payable during 2024. The proposed dividends are subject to approval of the shareholders at the General Assembly meeting.

The Board of Directors, through circulation on 28 February 2024, also recommended to increase the Company’s capital by granting bonus shares to the Company’s shareholders through capitalisation of SAR 14.6 million from the retained earnings by granting 1 share for every 500 shares owned. The bonus share issuance is subject to approval of the shareholders at the General Assembly meeting.

On 26 January 2023, the Board of Directors approved a dividend payment of SAR 606.8 million (SAR 0.83 per share) for the year 2022, payable during 2023. The proposed dividends were approved by the shareholders at the General Assembly meeting held on 22 June 2023. The dividend was paid on 12 July 2023.

The declared dividends of SAR 560 million for 2021 were approved by the shareholders at the ordinary General Assembly of 30 June 2022 and paid on 21 July 2022.

The table below sets out a summary of the dividends declared by the Company during the financial years ending 31 December 2021, 2022, and 2023, along with the ratio of dividends to the net profit attributable to the equity holders of parent:

Description of the main scope of business of the Company and its affiliates. If there are two or more, a statement showing each activity and how it affects the Company businesses and results shall be attached

ACWA Power Company (the ‘Company’ or ‘ACWA Power’) is a Saudi joint stock company established pursuant to a ministerial resolution numbered 215 dated 2 Rajab 1429H (corresponding to 5 July 2008) and is registered in Riyadh, Kingdom of Saudi Arabia, under commercial registration number 1010253392 dated 10 Rajab 1429H (corresponding to 13 July 2008G). The Company’s Head Office is located at Exit 8, Eastern Ring Road, Qurtubah District, P.O. Box 22616, Riyadh 11416, Kingdom of Saudi Arabia.

On 11 October 2021, following a landmark Initial Public Offering (‘IPO’), the Company successfully listed on the Saudi Stock Exchange (‘Tadawul’).

The Company’s main activities are the development, investment, operation and maintenance of power generation, water desalination and green hydrogen production plants and bulk sale of electricity, desalinated water, green hydrogen and/or green ammonia to address the needs of state utilities and industries on long‑term, offtaker contracts under utility services outsourcing models in the Kingdom of Saudi Arabia and internationally.

Description of the Company’s significant plans and decisions (including changes to the structure, expanding the Company’s operations or halting them) and the future expectation

The Company operates in accordance with its business model of Develop‑Invest‑Operate‑Optimise within the framework of its strategy making power, water and green fuels more affordable and accessible in Saudi Arabia and other international markets in which the Company chooses to operate. Adding new projects or partial or full disposal of its existing businesses is ordinary course of business for the Company.

The Company recently announced its plan to triple its assets under management to USD 250 billion by 2030 as part of its new growth strategy. Further details on the new growth strategy will be disclosed in integrated annual report of 2023 due to be published in April 2024.

Society/Local communities

Supporting local content

The Company is committed to supporting and implementing local content across all project types during construction and operation. This requires the inclusion and development of local suppliers, and local employment and training.

ACWA Power exceeded local content targets required in the Kingdom for its projects under construction and strives to continue this track record in the projects under construction and in operation.

Approximately 60% of ACWA Power’s active projects are located in the Kingdom. The estimated local content score for ACWA Power in the Kingdom in 2023 is around 48%. This covers local content across goods and services, labour, training, RandD and depreciation in the Kingdom.

ACWA Power contributes to the communities in which it operates by encouraging and developing local service providers, suppliers and the local workforce to stimulate national talent and assist in developing energy transition initiatives.

Stimulating the Kingdom’s ingenuity

We continue to support the considerable potential of Saudi youth to originate progressive and sustainable ideas. To highlight the efforts of the next generation of innovators, ‘The power is Within You’ is an initiative which includes an incubation programme designed to help develop winning ideas, using a dedicated training and mentoring process.

The programme empowers youth in the Kingdom to create, ideate and innovate in the power and water sectors. It is part of ACWA Power’s drive to achieve the renewable energy goals set out in Vision 2030 and builds on our successful track record of utilising cutting‑edge technology to transform operations.

Our community initiatives under the Company’s Corporate Social Responsibility (‘CSR’) programmes

ACWA Power has always considered itself to be an integral member of the communities in which it operates. We prioritise community engagement and address the most pressing issues our communities face with relevant CSR programmes. We are fully committed to community development, social responsibility and supporting sustainable livelihoods.

We channel resources to CSR initiatives wherever we operate – whether mandated by the terms of our agreements or not – and encourage our business units operating in diverse locations to factor CSR considerations into their operations. When launching CSR initiatives, due consideration is given to the diversity of regional cultures, values and customs.

Social contribution

The social contribution of ACWA Power has increased as the Company has grown, and in recognition of the fact that local communities share in the Company’s success.

ACWA Power’s flagship project is the Energy and Water Academy, formerly named Higher Institute for Water and power Technologies (HIWPT); the Company has continued to invest in the institution as a powerhouse that provides technical training in renewable energy and water desalination for youth in the Kingdom.

ACWA Power has also sponsored Shirin College in Uzbekistan to develop a training and education programme in renewable energy.

ACWA Power has sponsored other such educational initiatives in countries including Oman, South Africa, Turkey, Egypt and Morocco.

Beyond education and training, the Company has supported other community initiatives, for example, the work of the Emirates Marine Environmental Group (EMEG), which is protecting the marine habitat along the Hassyan coastline.

CSR spending

The Company prioritises education and employability in the Kingdom and Uzbekistan with EWA and Shirin College, respectively, and focuses on community development in Morocco and South Africa.

During the year 2023, the Group contributed SAR 10.4 millionSAR 10.4millionrepresents the total CSR spending as reported in the 2023 year‑end consolidated financial statements of the Company and does not include the total CSR spending for JV’s and associates. (2022: SAR 18.4 million) in various countries including Saudi Arabia primarily to support education and related infrastructure.

In addition to this, the Group has a commitment to contribute SAR 75.0 million towards corporate social responsibility initiatives in Uzbekistan.

Tree planting in 2023

ACWA Power undertook a five‑year strategic initiative back in 2022 in line with the Saudi Green Initiative to plant 10 billion trees across Saudi, to establish a nursery plant to produce 1,000,000 seedlings and distribute them to various beneficiary entities such as the Government and private sectors for a total budget of SAR 1.6 million. 200,000 trees were planted during 2023 as part of it’s initiative.

In addition to the above, ACWA Power has planted over 8,200 trees in Morocco, UAE and Jordan during 2023.

Risk

The Board has established the control environment, approved the risk appetite statement, risk management policy, and delegated oversight responsibilities under the Enterprise Risk Management (ERM) framework to the Board’s Risk Management Committee.

ACWA Power together with its subsidiaries, joint ventures and affiliates (the ‘Group’) adopted comprehensive, state‑of‑the‑art approach to risk management that follows the principles and methodology of the ISO 31000 guidance standard. Most of the Group’s managed risks are related to the different phases of its business model of developing, investing in, operating, and optimising the power generation, water desalination and green hydrogen production assets, encompassing a full lifecycle of such assets.

The Group promotes a strong culture of risk management, combined with an approved risk framework that effectively supports appropriate risk awareness, behaviours and risk‑based decision‑making. In accordance with the Group’s risk management framework, we have developed specific responsibilities, tools and guidance, and systematically assess, mitigate, monitor risks at corporate level and during development, construction, and operation phase of projects to manage all relevant identifiable risks effectively.

Business Development

All business development projects go through a gated approval process by the Management Investment Committee and the Board Executive Committee. Project‑related market, technical, legal and financial risks are reviewed for the required risk adjusted return. An additional step has been introduced in the approval process for peer risk review, where the risk Management Team independently reviews the evaluated risks. Residual risks are summarised in the form of a risk matrix with potential mitigations. Sensitivities are analysed for critical bid assumptions and related risks. All key risks are quantified, where feasible, in terms of rate of returns, and graphically presented, including potential upsides as well. This provides reasonable assurance on the project’s risk profile and ensures informed decision‑making by the management, the Risk Management Committee and the Board. This process is applied for all investments (greenfield and acquisitions), divestments and changes in offtake agreements, if and when applies.

Portfolio Management

The Group focuses on developing scalable investment platforms and maintaining a portfolio with a technologically and geographically diversified asset base. As our portfolio risk landscape continues to evolve, the risk management function is involved to ensure identifying, assessing, and constantly monitoring potential threats and opportunities that we could face to remain resilient on projects under construction as well as assets under operation. For our projects under construction, we remain actively engaged with our EPC contractors and encourage them to assess risks financially (by quantifying the potential risk), through schedule, quality, health and safety, and reputation. This gives more insight to the portfolio team to understand and act accordingly.

Operations and Maintenance

The Group uses centralised expertise via NOMAC, a 100%‑owned O&M subsidiary of ACWA Power, to optimise the operation and maintenance of our fleet of assets diversified in technology and geography and ensure effective management and mitigation of risks associated with operational safety and reliability of supply.

Contractual risks are managed through an effective contract compliance and tracking mechanism; operational risks through robust operational and maintenance procedures including digitalised condition monitoring and prediction; and supply and price risk is managed by a comprehensive and efficient Global supply chain management. In addition, the Group also plays a direct role in selecting its partners, contractors, and technology for its projects to ensure an optimal solution for the project while reducing the overall exposure (directly or indirectly) to identified risks.

Material differences in the operational results compared to the preceding year’s results, along with any expectations announced by the Company

For further details, please refer to the 2023 year‑end results published on Tadawul on 29 February 2024 Tadwaul Announcement, as well as the Investor Report published on the Company’s Website Investor Report

Financial InformationFinancial information has been extracted from the audited consolidated financial statements and underlying notes to the financial statements of ACWA Power for the respective years. For further details and references, kindly refer to the audited financial statements for the years 2023, 2022, 2021 and 2020 available on ACWA Power’s Investor Relations website

Geographic Analysis of the Group’s revenue from continuing operations

The Company is headquartered in the Kingdom of Saudi Arabia. The geographical concentration of the Group’s revenue is shown opposite:

Debt Instruments issued by the Company and Company’s subsidiaries

On 14 June 2021, the Group issued an Islamic bond (Sukuk) amounting to SAR 2,800.0 million at par (sak) value of SAR 1 million each, without discount or premium. Further, on 2 February 2023, the Group completed the issuance of SAR 1,800 million Sukuk under its SAR 5,000 million Sukuk issuance programme. The Sukuk issuance bears a return based on Saudi Arabia Interbank Offered Rate (‘SIBOR’) plus a pre‑determined margin payable quarterly in arrears. The Sukuk will be redeemed at par on its maturity i.e., seven years from the date of the issuance with a call option (only on the second tranche) effective on or after five years from the issuance date.

APCM bond (‘the Notes’) was issued during 2021 with an aggregate principal of USD 166.2 million. The Notes carry an interest at 3.7% per year and the principal repayments in semi‑annual instalments from 31 May 2021, with final instalment due on 27 May 2044. The Notes were issued to refinance an existing long‑term facility of one of the Group’s wholly‑owned subsidiary, Shuaibah Two Water Development Project (‘Shuaibah II’).

In May 2017, the Group (through one of its subsidiaries, APMI One) issued bonds with an aggregate principal of USD 814.0 million. The bonds carry a fixed rate of interest at 5.95% per year due for settlement on a semi‑annual basis. The bonds’ principal is due to be repaid in semi‑annual instalments commencing from June 2021, with the final instalment due in December 2039. The bonds are collateralised by cash flows from certain equity accounted investees and subsidiaries of the Group. During the year ended 31 December 2022, ACWA Power has partially bought back bonds amounting to USD 400.7 million (equivalent to SAR 1,502.7 million) at a discount. The Group has recognised a gain of SAR 74.8 million in the year ended 31 December 2022 on the buyback which is net of the proportionate share in the unamortised transaction cost in relation to the bond’s issuance. The gain is presented within the other income (refer note 29.1 of the Company’s 2023 audited consolidated financial statements).

Borrowings by project companies are primarily secured against underlying assets (i.e., plant, machinery and equipment – note 5 of the Company’s 2023 audited consolidated financial statements) of the respective project companies, except borrowings that are with recourse to the Group amounting to SAR 3,348.6 million as at 31 December 2023 (31 December 2022: SAR 2,941.3 million).

Statutory Amounts Paid and Payable