ACWA Power : Investor Report as at and for the period ended March 31st, 2024

ACWA POWER Company

Investor Report

For the three-months ended 31 March 2024

ACWA POWER

1Q2024 Investor Report

For the three months period ended 31 March 2024

CEO's Letter

Dear stakeholders,

As expected, we have made a steady start to our first quarter in new business development. I am pleased to report our entry into a new market, with the signing of a water purchase agreement (WPA) in Senegal for the construction of 400,000 m3/day water desalination plant in Dakar, Senegal. This will be the first desalination project in the country to be facilitated through a public-private partnership and represents a significant step in addressing the water challenges in Sub- Saharan Africa.

Our portfolio expansion in Uzbekistan continued. At the end of March, we signed the power purchase agreement (PPA) for the Nukus2 200 MW wind power project along with battery energy storage system (BESS). This marks our 14th project in Uzbekistan and underscores our dedication to supporting the country's renewable energy goals.

During the quarter, we achieved the financial close of the Hassyan IWP (water desalination project) in the UAE, and subsequently in April, we announced to the market the signing of the financing documents of the Qassim1 and Taibah1 combined cycle power plants (CCGTs) in KSA.

Another important milestone was the signing of the contract extensions in Oman, for Barka Water and Power Company SAOG (Barka). This demonstrates the post-PPA opportunities available given the strategic significance of our projects to the governments and offtakers we are dedicated to serving.

On the operations side, despite both the 1,500 MW Sudair PV in KSA and the 909,218 m3/day Taweelah IWP in the UAE have reached their full capacity commercial operations, I must admit my disappointment of the forced outage at the NOORo 3 CSP plant in Morocco once again due to technical issues at the molten salt tank. Considering our commitment to continuous improvement, and to ensure future reliability of the plant, the project company has already undertaken the necessary steps to repair the existing tank in addition to building a new tank with an improved design that will take over from the repaired tank once complete.

The unprecedented rainfall and subsequent flooding in the UAE have also caused limited disruptions to our operations including some construction activity. All assets follow strict safety-first protocols during the restoration activities and the project companies have served respective insurance notifications and force- majeure preservation notifications.

While achieving operational excellence in our plants remains our core focus, we stepped up our efforts towards executing our ambitious growth strategy both in KSA and beyond within the framework of our Strategy 2.0 that we shared with the investment community in the past few months. I am optimistic about announcing our first project in China in the near future in addition to achieving several other milestones for either the existing projects in development or the new ones in our growth pipeline in the rest of the year.

Marco Arcelli

Chief Executive Officer

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ACWA POWER

1Q2024 Investor Report

For the three months period ended 31 March 2024

	Highlights1 leader in energy transition and first mover into green hydrogen.
				ACWA Power is the world's largest private water desalination company in the world, and a
	Portfolio2					BESS3	44.5%
82ASSETS				6.5GWh	NET ZERO
countries			Gross Power Capacity	of the Gross
		Power Capacity	EMISSIONS BY 2050
				13			55.1GW
										24.5GW
		million		million			AUM	SAR
		3
8	m /day	1.2+tonnes/pa green ammonia
					321.3 billion	Renewable Assets Capacity

Financial Highlights4

401mn	296 mn
SAR	SAR
Operating income before	Consolidated Net Profit
impairment loss and	attributable to equity
other expenses	holders of parent
28.2	9.8

The shareholder approved payment of a cash dividend distribution of SR 329.0 million (SR 0.45 per share) for the year 2023 and distribution of bonus shares of 1 share for every 500 shares owned by the shareholders.

Operational Highlights	Lost0.008Time Injury Rate (LTIR)
Health, Safety,
& Environment (HSE)	1Q 2023: 0.011
Power Availability	89.8%
	1Q 2023: 88.5%
Water Availability	94.5%
	1Q 2023: 94.7%

1. As at and for the three months period ended 31 March 2024.
2. Gross capacities or total investment costs of projects that are operational, under construction or in advanced development.
3. Nameplate DC installed capacity.
4. The variance represents the year-on-year variance as at and for the 3 month period ending March 31, 2024 vs March 31, 2023.

ACWA Power Investor Relations	3
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ACWA POWER

1Q2024 Investor Report

For the three months period ended 31 March 2024

ACWA POWER COMPANY AND ITS SUBSIDIARIES

(Saudi Listed Joint Stock Company)

("ACWA Power" or the "Company" or the "Group")

MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL RESULTS AND POSITION AS AT AND FOR THE THREE MONTHS ENDED 31 MARCH 2024

1- Introduction

This section provides an analytical review of the financial results of ACWA Power for the three-months ended 31 March 2024, and it should be read in conjunction with the Company's Interim Condensed Consolidated Financial Statements and Independent Auditor's Review Report for the three months ended 31 March issued by KPMG Professional Services (Certified Public Accountants) (the "Interim Condensed Consolidated Financial Statements").

All amounts are in SAR million, rounded up to one decimal point, unless stated herein otherwise. Percentages have also been rounded up to the available number of digits presented in the tables, when applicable. A calculation of the percentage increase/decrease based on the amounts presented in the tables may not therefore be precisely equal to the corresponding percentages as stated.

"Current quarter" or "current period" or "1Q2024" or the "first quarter of 2024" corresponds to the three-months period ended 31 March 2024 whereas "previous quarter" or "previous period" or "1Q2023" or the "first quarter of 2023" corresponds to the three-months period ended 31 March 2023.

In the Interim Condensed Consolidated Financial Statements, certain figures for the prior periods have been reclassified to conform to the presentation in the current period. Please refer to Note 23 of the Interim Condensed Consolidated Financial Statements.

This section may contain data and statements of a forward-looking nature that may entail risks and uncertainties. The Company's actual results could differ materially from those expressed or implied in such data and statements as a result of various factors.

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ACWA POWER

1Q2024 Investor Report

For the three months period ended 31 March 2024

2- Key factors affecting the comparability of operational and financial results between reporting periods

2.1 Definition

Although the Company's business model of Develop, Invest, Operate, and Optimize allows it to generate and capture returns over the full life cycle of a project, these returns may differ from one reporting period to another, depending on where these projects are in their project life cycles (i.e., in advanced development, under construction or in operation). Projects achieving financial close ("FC") and projects achieving either initial or plant commercial operation dates ("ICOD" or "PCOD" respectively) are typical examples that may lead to such variances in the values presented on the financial statements from one period to another, potentially rendering analysis of these variations unreasonable without additional information.

Additionally, there may occasionally be transactions that the management might deem uncommon during the ordinary course of business and expect them not to recur in the future. If such a case exists in a given reporting period, the management explicitly identifies and reports the financial impact on the consolidated reported net profit for the concerned period via non-IFRS adjusted net profit line item.

2.2 Key factors for the current period

2.2.1 Projects achieving financial close ("FC")

Typically, a project company achieves its FC when the financing documents between the project company and the lenders are signed, and the project company has access to funding from its lenders following the completion of the conditions precedent. At this point, the Company normally becomes entitled to recognize development fees from the project company, if any, and recover the project development and bidding costs incurred to-date, including reversal of any related provisions. Moreover, the Company typically earns additional service fees such as project and construction management fees, which are recognized during the construction period of the project based on pre-determined milestones.

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ACWA POWER

1Q2024 Investor Report

For the three months period ended 31 March 2024

The following table lists all projects that achieved their respective FCs in the past 15 months to 31 March 2024.

Financial Closes1 in the past 15 months (January 2023 - March 2024)

Month

Project 1

Location

Total Investment Cost SAR Billion

Contracted

Gross Capacity

(Water in

thousands)

Accounting

Type 3

ACWA Power's

Effective

Ownership 2

During 2024

Mar'24	Hassyan IWP	UAE	3.4	818 m3/day	EAI	20.40%
			During 2023
Nov'23	PIF3-Al-Kahfah	Saudi Arabia	3.9	1,425 MW	EAI	50.10%
solar PV IPP
Nov'23	PIF3-Ar Rass2	Saudi Arabia	5.3	2,000 MW	EAI	50.10%
solar PV IPP
Nov'23	PIF3-Saad2	Saudi Arabia	3.0	1,125 MW	EAI	50.10%
solar PV IPP
Oct'23	Azerbaijan wind	Azerbaijan	1.1	240 MW	SUB	100.00%
IPP
Sep'23	Rabigh 4 IWP	Saudi Arabia	2.5	600 m3/day	EAI	45.00%
Aug'23	Layla PV IPP	Saudi Arabia	0.4	80 MW	EAI	40.10%
July'23	Al Shuaibah PV	Saudi Arabia	8.2	2,631 MW	EAI	35.01%
1 & 2
May'23	Nukus (Karatau)	Uzbekistan	0.4	100 MW	SUB	100.00%
Wind IPP
Apr'23	Kom Ombo PV	Egypt	0.7	200 MW	SUB	100.00%
	NEOM Green			3,883 MW;	EAI	33.33%
Mar'23	Hydrogen	Saudi Arabia	31.9
600 tonnes/day
	Company
Feb'23	Ar Rass PV IPP	Saudi Arabia	1.7	700 MW	EAI	40.10%

Source: Company information.

• Some of the projects may be in the process of closing the conditions precedent of their respective FCs.

• ACWA Power's effective share as at 31 March 2024. Note that the current effective shareholding may be different.
  3 Equity accounted investee (EAI) or Subsidiary (SUB)

2.2.2 Projects achieving initial or project commercial operation dates ("ICOD" or "PCOD")

A project starts providing power and/or water, partially or fully, under its offtake agreement in the period it achieves either ICOD or PCOD and subsequently begins recognizing revenue and charging costs into the profit or loss statement. It is typically at this stage that NOMAC starts recognizing its stable and visible O&M fees too. When the project company becomes eligible to distribute dividends and when such dividends are declared, the Company additionally receives dividends in proportion to its effective share in the project.

Depending on its effective ownership and control relationship in the project, the Company either consolidates the financial results of the project (subsidiary) or recognizes its share of net income in the project (equity accounted investee) on the Company's consolidated financial statements.

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ACWA POWER

1Q2024 Investor Report

For the three months period ended 31 March 2024

The following table lists all projects that achieved their respective ICOD or PCOD and thus have begun contributing to the Company's results in the past 15 months to 31 March 2024.

ICOD/PCOD in the past 15 months (January 2023- March 2024)

ICOD/PCOD*

Project

Location

Online Capacity1 (Water in

thousands)

Remaining capacity to bring online

Accounting	ACWA Power's
Type	Effective Share2

During 2024

Mar-24*	Al Taweelah IWP	UAE	909 m3/day	-	EAI	40.00%
Jan-24	Sirdarya CCGT3	Uzbekistan	918	582	EAI	51.00%
Jan-24	Sudair	Saudi Arabia	1500 MW	-	EAI	35.00%
PV(Group3)
			During 2023
Nov-23*	Hassyan IPP	UAE	2400 MW	-	EAI	26.95%
Nov-23	Noor Energy 1	UAE	717 MW	233 MW	EAI	25.00%
(PT Unit)200MW
Oct-23	Sudair PV	Saudi Arabia	1,125 MW	375 MW	EAI	35%
(Group2)
Sep-23	Sudair PV	Saudi Arabia	750 MW	750 MW	EAI	35%
(Group1)
Jun-23	Shuaa Energy	UAE	900 MW	-	EAI	24.00%
3 PV
Apr-23	Al Taweelah IWP	UAE	833 m3/day	76 m3/day	EAI	40.00%
Mar-23	Hassyan IPP	UAE	1,800 MW	600 MW	EAI	26.95%
(Unit 3)
Feb-23*	Jazlah IWP	Saudi Arabia	600 m3/day	-	EAI	40.20%
(Jubail 3A)
Feb-23	Noor Energy 1	UAE	517 MW	433 MW	EAI	25.00%
(CT Unit)100MW
			184,000 Nm3/hr
Jan-23	Jizan IGCC	Saudi Arabia	Hydrogen	760 MW	EAI	21.25%
585 MT/hr Steam
			Approx. 3,040MW Power
Jan-23	Noor Energy 1	UAE	417 MW	533 MW	EAI	25.00%
(PT Unit) 200MW

Source: Company information.

• Some projects may not have reached their full operational capacity and obtained official certificate of full commercial operations from the offtaker yet.

• Online capacity that is in operation as at the stated ICOD/PCOD date.

• ACWA Power's effective share as at 31 March 2024. Note that the current effective shareholding may be different.

3 Includes ICOD and EPG (early power generation) of two units, Power Units 1 and 2, in January 2024, 457MW and 461MW, respectively.

Details for the Company's entire portfolio of projects can be found on the Company's website (www.acwapower.com) in addition to the appendix at the end of this Investor Report.

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ACWA POWER

1Q2024 Investor Report

For the three months period ended 31 March 2024

2.2.3 Dividends and Bonus Shares

The Company's cash distribution to shareholders accumulated to SAR1.2B for the years 2021 and 2022 with successively increasing amounts in line with the guidance during the IPO. Since then, the Company has revised its portfolio's growth projections significantly upwards to include additional project pipeline that the Company expects will require equity commitments in excess of the levels anticipated during the IPO. In light of these strategic amendments and to optimize cash utilization without deteriorating total distribution value to its shareholders, the Company's board resolved to recommend to the general assembly a cash and non-cash bonus share distribution for 2023.

On 28 February 2024, the Board of Directors approved a cash dividend distribution of SR 329.0 million (SR 0.45 per share) for the year 2023, payable during 2024. Additionally, on the same date, the Board of Directors approved and recommended to distribute bonus shares to the Company's shareholders amounting to SAR 14.6 million from the retained earnings.

The cash dividend distribution of SR 0.45 per share and the bonus share distribution of 1 share for every 500 shares owned by the shareholders at the record date via capital increase have both been approved by the shareholders at the extraordinary general assembly meeting held on 29 April 2024.

2.2.4 Long term incentive plan (LTIP) and share buy-back

In 2023, the Board of Directors approved to replace the existing cash-based LTIP with a share-based incentive plan (hereinafter referred as the "Employees Stock Incentive Program" or the "Program"). In this regard, on 22 June 2023, the shareholders of the Company approved to buy back Company's shares with a maximum of two (2) million shares.

During the period ended 31 March 2024, the Company purchased 264,678 shares amounting to SR 73.0 million at then prevailing market rates. The Group has recognized these shares within treasury shares in the interim consolidated statement of changes in equity.

Subsequent to the period ended 31 March 2024 and on 18 April 2024, the Group has launched the detailed terms and conditions of the Program to eligible employees and accordingly satisfied the grant date criteria (as specified under IFRS 2 - Share-based payment). In this regard, during the period a provision of SAR 16.3 million has been recognised within general and administration expenses. Given the service period has already commenced as specified in the Program, the related provision of SAR 42.3 million has been moved to equity from liability in these interim condensed consolidated financial statements.

2.2.5 Impairment loss in Noor 3 CSP IPP ("Noor 3") in Morocco

During the period ending 31 March 2024, the Noor 3 CSP plant in Morocco experienced a technical issue in the molten salt tank, which compels an extended forced outage as the plant is expected to remain non-operational until the end of the current year ("Outage Period") while repair work is undertaken. This event triggered a review of impairment, and the management has recognized an impairment loss of SAR 145.8 million (ACWA Power share SAR 109.3 million), representing the expected loss of generation during the Outage Period. The Group has recognized the loss within the interim consolidated statement of profit or loss within impairment loss and other expenses, net. The management will continue to review the performance of plant and cost estimate in relation to remedial work and necessary impact will be taken in the financial statements, as and when required.

The Company deems this transaction as non-routine hence adjusted its financial impact on the period's consolidated net profit. Please see Section 3.2.1.

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ACWA POWER

1Q2024 Investor Report

For the three months period ended 31 March 2024

2.2.6 Income in relation to termination of some hedging instruments

The Group, in accordance with financing documents, enters into interest rate swap (IRS) agreements to hedge against the risk of interest rate movements and accordingly applies cashflow hedge accounting as per the IFRS. In certain cases, such IRS may be acquired before the financial close at the time of the signing of the power or water purchase agreements based on the Company's forecast of probable interest rates at the time of the financial close to hedge against the interest rate volatility between signing of the purchase agreement and the financial close (pre-hedge).

During the current period, the Company has recycled certain hedge reserves upon discontinuation of pre-hedging contracts (the "Interest Rate Swaps"), as the underlying highly probable forecast transaction is no longer expected to occur within the Group due to expected divestment, amounting to SR 313.4 million (31 March 2023: Nil). At the inception of the Interest Rate Swaps, it is not the management's intention to do early termination. This action was necessitated by the anticipated non-occurrence of the underlying highly probable forecast transactions within the Group, attributed to expected divestments, and significant modifications to the hedged risk. Consequently, the management does not expect that the discontinuation of such Interest Rate Swaps will be a recurrent event.

The Company deems this transaction as non-routine hence adjusted its financial impact on the period's consolidated net profit. Please see Section 3.2.1.

2.2.7 Divestments

Financial optimization is a core element of the Company's business model that provides the Company with an opportunity to improve its returns and recycle its capital for further investment. The Company therefore actively seeks to identify, and capture if beneficial circumstances prevail, project refinancing or equity divestment opportunities in accordance with its strategic business model.

The Company did not announce any new divestment transactions during the current period.

There was no change in the status of the transactions that were initiated prior to the current period. Please refer to the Company's previous Investor Reports or published financial statements for the outstanding transactions.

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ACWA POWER

1Q2024 Investor Report

For the three months period ended 31 March 2024

3- Discussion and analysis of management's key financial indicators

ACWA Power's management uses several key performance metrics to review its financial performance. These metrics and their typical reporting frequencies are listed below followed by the management's discussion and analysis for the current period.

Key financial performance indicator

Typical MD&A Reporting frequency

IFRS / non-IFRS

Operating income before impairment loss	Quarterly	IFRS
and other expenses
Consolidated Net profit attributable to	Quarterly	IFRS
equity holders of parent
Parent Operating Cash Flow (POCF)	Semi-annually	Non-IFRS
Total Parent Net Leverage and Parent Net	Semi-annually	Non-IFRS
Leverage Ratio

3.1 Operating income before impairment loss and other expenses

Operating income before impairment loss and other expenses represents ACWA Power's consolidated operating income before impairment loss and other expenses for the continuing operations and includes ACWA Power's share in net income of its equity accounted investees.

SAR in millions

First Quarter (1Q)

2024	2023	% change

Operating income before impairment loss and other expenses

401

559

(28.2)

Source: Reviewed financial statements

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