Sustainability strategy

ACWA Power’s growth strategy sets the ambition on how much capacity we plan to have by 2030, broken down into renewable power, flexible generation (allowing for periodic full load, this includes fast start‑up, shutdown, but also operation at part load), green hydrogen and water desalination. Under this plan, to triple our assets by 2030, more than 75% of power additions will be from renewables. These additions will ensure that we comfortably meet our 2030 target to reduce our emissions intensity (t CO₂e/MWh) by 50% relative to our 2020 level.

Additionally, we have plans to increase the amount of renewable power being used as the source of energy in our water desalination business, to further support the decarbonisation of our water portfolio.

Our strategy is shaped by our stakeholders’ priorities and, as such, we engage with a variety of key stakeholders, including offtakers, partners, shareholders and suppliers.

ACWA Power’s digital team has been building a comprehensive ESG platform, which will source all the required ESG data points, and help us better monitor and report our ESG‑related KPIs.

In light of our recently announced ambitious 2030 growth plan, we are reviewing our sustainability strategy and following a planned stakeholder engagement exercise and materiality assessment, we will publish our new strategy.

ACWA Power is listed on the Saudi Exchange, which supports the UN Sustainable Stock Exchanges Initiative. The Saudi Exchange has ESG Disclosure Guidelines and encourages sustainable investment, in collaboration with market participants such as issuers and investors. ACWA Power aligns with the Saudi Exchange and recognises that our ESG strategy is integral to our business strategy and that it is a source of long‑term value creation.

ACWA Power is committed to Saudi Vision 2030

Energy transition takes ambition
ACWA Power is a key enabler of Saudi Vision 2030

Energy transition takes ambition
ACWA Power is a key enabler of Saudi Vision 2030

ACWA Power will continue to lead the Kingdom’s energy transition as a national and global decarbonisation champion.

• The Kingdom’s aims to achieve an optimal energy mix for electricity production by having gas and renewable energy at approximately 50% each by 2030.
• ACWA Power and the Public Investment Fund (PIF) entered into a strategic agreement for ACWA Power to lead the development of 70% of KSA’s renewable energy projects under the PIF Renewable Programme.
• Saudi Ministry of Energy has announced 20GW Renewable energy capacity in DC renewable deployment every year till 2030.
• We have identified 13.6 GW of renewables projects under the PIF renewables programme.

ACWA Power aligns its sustainability strategy with Saudi Vision 2030 objectives for an ambitious nation, thriving economy and vibrant society. ACWA Power’s central focus on energy transition, and its renewable energy and water projects, contribute to the Kingdom’s diversification policy, create local employment, provide career opportunities for women and help to give the nation a sustainable future that is less dependent on the oil industry.

The cornerstone of our ESG approach and strategy is centred on energy transition, low‑carbon product leadership, water management, health and safety, and corporate governance.

As such, we are responding to a changing society, as well as supporting the shift to a low‑carbon economy, while capturing growing business opportunities in energy transition.

This strategy also enables the investment community to assess our performance against ESG‑related indicators, and it demonstrates transparency and the effective management of our activities.

Reporting frameworks

ACWA Power has reported the information for the period from 1 January 2023 to 31 December 2023 in reference to the GRI reporting framework (2021). In addition, we have referenced other standards such as GHG protocol and Occupational Safety and Health Administration (OHSA), which demonstrate a high degree of alignment with the GRI guidelines, to calculate certain indicators. Where applicable, relevant recommendations from the Task Force on Climate‑related Financial Disclosures (TCFD), SASB standards (Electric utilities and power generators 2018, Solar technology and project developers 2018), World Economic Forum and Future Investment Initiative Institute metrics have also been used. Indexes of the standards and recommendations used can be found in the Appendix.

Roadmap to net zero target (2050)

Our strategy has set ambitions for growing our capacity across our key businesses, renewable power, flexible generation, green hydrogen and water desalination by 2030. Under this plan, more than 75% of power additions will be from renewables and battery storage. To meet our net zero target, we will first reduce and remove our operational emissions, but as flexible generation capacity may still be required even in 2050, some of the plants could still be in operation in 2050, though capacity utilisation levels are expected to be very low, with most plants expected to run as peak‑load only. Being a power technology leader, we will continue to monitor and develop the required solutions to help us decarbonise our flexible generation fleet and be net zero by 2050. This will include such initiatives as fuel switching with potential substitution or mixing of natural gas with green hydrogen, Carbon Capture and Storage (CCS), and Carbon Capture Utilisation and Storage (CCUS) to further reduce CO₂ emissions.

Sustainable procurement

We give due consideration to the environmental, social and economic consequences of our procurement practices and raw material sourcing. Our procurement policy and the supporting procedures set out how the procurement process operates, its application standards, and clarifies the roles and responsibilities of those involved in procurement.

In addition, the policy extends to any third‑party organisations spending ACWA Power funds, ensuring that any organisations with which we collaborate, such as contractors, also consider their environmental, social and economic impact in their procurement practices.

Local content

The Company is committed to supporting and implementing local content across all project types during construction and operation. The minimum requirement for local content during construction is 15% and can reach up to 40% depending on the project type, while the minimum during operation is 50%. All aligned and in accordance with the relevant prescriptions from the authorities as to how compute the local content contribution in our projects. This requires the inclusion and development of local suppliers, local employment and training. ACWA Power exceeded local content targets required in the Kingdom for its under‑construction projects and strives to continue this track record in the projects underconstruction and in operation. Furthermore, the actual spent in Saudi based companies and for construction activities in the Kingdom is much higher and ranges from 40 to 75% depending on project and technology. Approximately 60% of ACWA Power’s active projects are located in the Kingdom. The initial estimation for local content score for ACWA Power as a corporate in the Kingdom in 2022 and 2023 has been around 40%. This covers local content across goods and services, labour, training, R&D and depreciation of assets in the Kingdom.

Workforce localisation

We are dedicated to increasing the proportion of local employees across all levels of our organisation by fostering local talent and building a more resilient, innovative, and inclusive organisation. Our vision for workforce localisation is to create a workplace that reflects the diversity and strengths of the communities we serve. Our workforce localisation strategy focuses on hiring and developing local talent, which helps to build stronger local economies and promotes inclusive growth. To enable this, we actively collaborate with local educational institutions, vocational training centres, and community organisations to create pathways for local talent to join our workforce. These partnerships help us to identify potential candidates and ensure that our training programs align with the needs of the local job market.

Our commitment to developing and hiring local talent can be assessed by the fact that 9 out of 12 countries, where we operate at scale, have an 80% or higher localisation rate. Through our collaboration with institutes like EWA (Energy & Water Academy) in KSA and Shirin College in Uzbekistan, we’re embedding localisation in our talent pipeline, resulting in us maintaining a 69% and 88% localisation rate in KSA and Uzbekistan, respectively.