Kuwait closes IPO of Shamal Azzour power, water plant
Kuwait Authority for Partnership Projects (KAPP) has announced that it has successfully concluded the public offering of its stake in Shamal Azzour Al Oula, the owner and operator of the Az-Zour North One Power and Water Plant.
The offering was equal to 50% of Shamal Azzour Al Oula stake totalling 550 million shares, while it was equivalent to 100% of KAPP’s stake in the company’s capital.
The remaining 50% stake will continue to be held by current shareholders (40% by Azour North One Holding Company, the strategic investor comprising a consortium of Engie (formerly GDF Suez), Sumitomo Corporation, AH Al Sagar & Brothers; 5% by Kuwait Investment Authority; and 5% by the Public Institution for Social Security).
The public offering, which ran from October 1 to November 29, drew a total of 127,000 individual investors.
Shamal Azzour Al Oula is Kuwait’s first company under Law 39 of 2010 which establishes Kuwaiti Joint Stock Companies to undertake building and implementing electrical power and desalination plants in the country.
It is the operator of Az Zour North One Power and Water Plant, which is the first privately-owned gas-fired combined cycle power and water desalination plant, under a 40-year build, operate and transfer agreement.
The facility commenced commercial operations in 2016 and currently supplies about 10% of Kuwait's installed power generation capacity and about 20% of the country’s installed water desalination capacity.
The transaction is governed by Kuwait’s Public-Private Partnership (PPP) legal framework, which requires the state, to offer 50% of the total ownership of PPP projects to Kuwaiti citizens through a public offering.
It was open to all those who have obtained Kuwaiti nationality as of September 15, 2019. There was an overwhelming response for the public offer which led to 127 per cent subscription.
KAPP’s advisor for the transaction was a consortium comprisng Watani Investments Company (NBK Capital) as the lead advisor, Kuwait Clearing Company as the technical advisor, International Counsel Bureau as the legal advisor and Bensirri Public Relations as the media advisor.
The public offering is mandated by the IWPP and PPP Laws, which form an integral part of an overarching governmental effort to include citizens in the ownership of megaprojects that are offered to private sector institutional investors, said a statement from KAPP.
In addition to providing attractive investment opportunities to citizens, PPP projects empower the private sector to take the lead in growing the national non-oil economy, it added.
According to KAPP, the power and water produced by the company will be entirely supplied to the national power and water grid operated by the Kuwait Ministry of Electricity and Water (MEW) under a 40-year long-term Energy Conversion and Water Purchase Agreement.