Acwa Power : Q3 Report

ACWA POWER Company

Interim Investor Report

For the three and nine-months periods ended 30 September 2024 ("3Q & 9M 2024 Interim Investor Report")

ACWA POWER

3Q & 9M 2024 Interim Investor Report

For the three and nine-months periods ended 30 September 2024

CEO's Letter

Dear stakeholders,

Establishing the groundwork for our ambitious growth target for 2030 program is quintessential and I am glad to see we made meaningful progress in developing new business both in Saudi Arabia and beyond. Within just three months of signing the Power Purchase Agreements (PPA) in June, we brought PIF Round 4 projects to financial close, adding another 5.5GW on our solar PV assets under construction. In Uzbekistan, which is our second largest market today, we secured the financial close for the Tashkent Power Plant-a hybrid PV and Battery Energy Storage System (BESS) plant-with a total investment cost of SAR 2 billion.

With these financial closes, we currently have 26 projects under construction, more than ever in ACWA Power's 20-year history.

In the meantime, the 700 MW Ar Rass Solar PV plant in Saudi Arabia has achieved its commercial operation date in just 18 months following its financial close in February 2023.

We continued to add new projects to fuel our growth. In September, we announced the signing of a Water Purchase Agreement (WPA) for the Hamriyah Independent Water Project (IWP) in the UAE, which, when completed, will produce 410,000 m³/day, marking our fourth reverse osmosis water desalination plant in the country.

Optimizing the operational and financial performance of our project companies is a critical element of our business model. ACWA Guc, our 950MW CCGT asset operating in Turkey, has been sustaining heavy financial losses owing to its foreign currency denominated long-term debt since 2018. During the past couple of years, the shareholders and the lenders have been negotiating terms for settling the debt. Consequently in August, we arrived at a settlement agreement which freed the asset from any debt, removing the financial shackles around ACWA Guc's performance. Further details including the history of this project as well as the financial impact of the transaction are disclosed in the notes to our financial statements in addition to the management's discussion and analysis of the financial results in this investor report.

Marco Arcelli

Chief Executive Officer

ACWA Power Investor Relations	2
www.acwapower.com | [e-mail]

ACWA POWER

3Q & 9M 2024 Interim Investor Report

For the three and nine-months periods ended 30 September 2024

Highlights1

leader in energy transition and first mover into green hydrogen

ACWA Power, the world's largest private water desalination company,

Portfolio2

BESS3

89ASSETS

12

5.0GWh 53.4%

NET ZERO

of the Gross

Gross Power Capacity

Power Capacity

EMISSIONS BY 2050

countries

65.2GW

35GW

m3/day 1.2+million

8.1

AUM

SAR

million

tonnes/pa green ammonia

347.9billion

Renewable Assets Capacity

Achievements during the nine months of 2024

Financially closed 7	Signed 5 PPA's (Power Purchase Agreements)
projects with an aggregate	and 2 WPA's (Water Purchase Agreements)
total investment cost of	adding 10.5 GW of renewable power and 0.4
around SAR 31 billion.	million m3/day of water to our portfolio.

2.4 GW of power and 76,000 m3/day of desalinated water reached initial or plant commercial operations dates and became online.

Financial Highlights4

2,365 mn	1,255mn	1,113 mn
SAR	SAR	SAR
Operating income before	Reported Net Profit	Adjusted profit
impairment loss and	attributable to equity	attributable to equity
other expenses	holders of parent	holders of the parent
12.5	16.0	2.8
Operational Highlights		0.02
Health, Safety,
& Environment (HSE)		Lost Time Injury Rate (LTIR)
		(9M 2023: 0.02)
Power Availability		93.9%
		(9M 2023: 92.3%)
Water Availability		97.4%
		(9M 2023: 96.1%)

1. As at and for the nine months period ended 30 September 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 nine month period ending September 30, 2024 vs September 30, 2023.

ACWA Power Investor Relations	3
www.acwapower.com | [e-mail]

ACWA POWER

3Q & 9M 2024 Interim Investor Report

For the three and nine-months periods ended 30 September 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 FOR THE THREE- AND NINE-MONTHS PERIODS ENDED 30 SEPTEMBER 2024

1- Introduction

This section provides an analytical review of the financial results of ACWA Power for the three- and nine-months periods ended 30 September 2024 (collectively the "first nine months of 2024" or "9M2024"), 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- and Nine-months Periods Ended 30 September 2024 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 "3Q2024" or "The third quarter of 2024" corresponds to the three months ended 30 September 2024 and "current period" or "9M2024" corresponds to the nine months ended 30 September 2024. Similarly, "previous quarter" or "3Q2023" or "The Third quarter of 2023" corresponds to the three months ended 30 September 2023 and "previous period" or "9M2023" corresponds to the nine months ended 30 September 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. See full disclaimer at the end of this document.

ACWA Power Investor Relations	4
www.acwapower.com | [e-mail]

ACWA POWER

3Q & 9M 2024 Interim Investor Report

For the three and nine-months periods ended 30 September 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.

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.

ACWA Power Investor Relations	5
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ACWA POWER

3Q & 9M 2024 Interim Investor Report

For the three and nine-months periods ended 30 September 2024

The following table lists all projects that achieved their respective FCs in the past 18 months to 30 Sep 2024.

Financial Closes1 in the past 21 months (Jan 2023 - Sep 2024)

Month

Project 1

Location

Total	Contracted
Investment	Gross Capacity	Accounting
Cost SAR	(Water in	Type 3
Billion	thousands)

ACWA Power's

Effective

Ownership 2

During 2024

Sep'24	PIF 4 Al-Muwaih Solar PV	Saudi Arabia	4.4	2,000 MW	EAI	35.10%
Sep'24	PIF 4 Haden Solar PV	Saudi Arabia	4.3	2,000 MW	EAI	35.10%
Sep'24	PIF 4 Al-Khushaybi Solar PV	Saudi Arabia	3.5	1,500 MW	EAI	35.10%
July'24	Tashkent (Riverside)	Uzbekistan	2.0	200 MW	SUB	100%
May'24	Taiba 1 IPP	Saudi Arabia	6.7	1,934 MW	EAI	40.00%
May'24	Qassim 1 IPP	Saudi Arabia	6.6	1,896 MW	EAI	40.00%
Mar'24	Hassyan IWP	UAE	3.4	818 m3/day	EAI	20.40%
		During 2023
Nov'23	PIF3-Al-Kahfah solar PV IPP	Saudi Arabia	3.9	1,425 MW	EAI	50.10%
Nov'23	PIF3-Ar Rass2 solar PV IPP	Saudi Arabia	5.3	2,000 MW	EAI	50.10%
Nov'23	PIF3-Saad2 solar PV IPP	Saudi Arabia	3.0	1,125 MW	EAI	50.10%
Oct'23	Azerbaijan wind IPP	Azerbaijan	1.1	240 MW	SUB	100.00%
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 1 & 2	Saudi Arabia	8.3	2,631 MW	EAI	35.01%
May'23	Nukus (Karatau) Wind IPP	Uzbekistan	0.4	100 MW	SUB	100.00%
Apr'23	Kom Ombo PV	Egypt	0.6	200 MW	SUB	100.00%
	NEOM Green Hydrogen			3,883 MW;
Mar'23	Saudi Arabia	31.9	220K tonnes/	EAI	33.33%
Company
			per year
Feb'23	Ar Rass PV IPP	Saudi Arabia	1.7	700 MW	EAI	40.10%

Source: Company information.

1. Some of the projects may be in the process of closing the conditions precedent of their respective FCs.
2. ACWA Power's effective share as at 30 September 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.

ACWA Power Investor Relations	6
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ACWA POWER

3Q & 9M 2024 Interim Investor Report

For the three and nine-months periods ended 30 September 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 21 months to 30 Sep 2024.

ICOD/PCOD in the past 21 months (Jan 2023- September 2024)

ICOD/PCOD*

Project

Location

Online Capacity1 (Water in

thousands)

Remaining capacity to bring online

Accounting	ACWA Power's
Type	Effective Share2

During 2024

Aug-24	AlRass1	Saudi Arabia	700 MW	-	EAI	40.10%
Jun-24	Kom Ombo PV	Egypt	200 MW	-	EAI	40.30%
Mar-24	Al Taweelah IWP	UAE	909 m3/day	-	EAI	40.00%
Feb-24	Noor Energy 1	UAE	950 MW	-	EAI	25.00%
Jan-24	Sirdarya CCGT3	Uzbekistan	918 MW	582 MW	EAI	51.00%
Jan-24	Sudair PV	Saudi Arabia	1,500 MW	-	EAI	35.00%
			During 2023
Nov-23	Hassyan IPP	UAE	2,400 MW	-	EAI	26.95%
Nov-23	Noor Energy 1	UAE	717 MW	233 MW	EAI	25.00%
Oct-23	Sudair PV	Saudi Arabia	1,125 MW	375 MW	EAI	35%
Sep-23	Sudair PV	Saudi Arabia	750 MW	750 MW	EAI	35%
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%
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%
Jan-23	Jizan IGCC3	Saudi Arabia	3,040 MW Power	760 MW	EAI	21.25%
Jan-23	Noor Energy 1	UAE	417 MW	533 MW	EAI	25.00%

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.

1. Online capacity that is in operation as at the stated ICOD/PCOD date.
2. ACWA Power's effective share as at 30 September 2024. Note that the current effective shareholding may be different.
3. Additionally plant capacity includes 184,000 Nm3/hr Hydrogen 585 MT/hr Steam.

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.

ACWA Power Investor Relations	7
www.acwapower.com | [e-mail]

ACWA POWER

3Q & 9M 2024 Interim Investor Report

For the three and nine-months periods ended 30 September 2024

2.2.3 ACWA GuC Debt restructuring

ACWA Guc is a 950 MW combined-cycle gas turbine power plant (the "Plant") situated in Kirikkale, Turkey. The Plant achieved Commercial Operation Date ("COD") in 2017 and, 100% owned and fully consolidated by ACWA Power (the "Group") until 2018. Turkey operates on a merchant basis, and Kirikkale sells electricity and capacity through bilateral contracts and participation in the balancing/day-ahead market.

After reaching COD, the Plant experienced significant operational and currency exchange losses due to foreign currency denominated project debts, aggravated by a downturn in the Turkish economy and the depreciation of the Turkish Lira against the US Dollar. In 2018, the Group divested 30% of its shareholding in the project company and fully impaired its investment, which resulted in recognized losses of SAR 1.5 billion and loss of control over the Project Company. In accordance with the accounting standards, it ceased to recognize its share of profits or losses from the Project Company thereafter.

In August 2024, ACWA Power and its related subsidiary entities have reached an agreement with the lenders of ACWA Guc and its minority shareholders ("Transaction"), whereby the lenders agreed to settle their outstanding loan, with one of the lenders agreeing to become a shareholder of ACWA Guc under certain shareholding agreements and convertibility conditions. Accordingly, the outstanding debt of approximately SAR 2,317.0 million has been purchased by the shareholders at a consideration payable in three years of SAR 731.0 million, of which ACWA Power's share was SAR 497.0 million.

As a result of the restructuring, the Group's effective shareholding in the Project Company has marginally increased to 73.0%. The Group continues to equity account for its interest in the Project Company based on the new shareholding agreement.

This restructuring improved the Project Company's net asset position and resulted in a gain reinstatement of net investment in the Project Company by SAR 1.2 billion at the Group level due to equity accounting of Project Company's net assets. However, concurrently the Group conducted a recoverability assessment of its net investment in the Project Company and after considering various factors affecting the recoverability have written down the investment in the Project Company by SAR 0.9 billion. The net impact has been reflected within the share of net results of equity accounted investees in these interim condensed consolidated financial statements.

2.2.4 Termination of Project in Africa

The company for the development of Project in Africa signed a PPA with the offtaker in December 2023. The completion of the conditions precedent of the financing arrangements have extended beyond the stipulated long-stop dates of the relevant contract and the Company applied for extension of the date or Amendments and Reinstatement of the PPA, which was rejected by the offtaker. Although discussions are ongoing between the Company and the offtaker, considering uncertainties surrounding the progression, the underlying forecast transactions are no longer considered highly probable. As a result, the cumulative balance of SAR 327.9 million previously recorded in the Other Comprehensive Income (OCI) hedge reserve has been reclassified to profit or loss along with project development cost of SAR 101 million.

ACWA Power Investor Relations	8
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ACWA POWER

3Q & 9M 2024 Interim Investor Report

For the three and nine-months periods ended 30 September 2024

2.2.5 Divestments

Financial optimization - typically in the form of equity sell-downs or project refinancings - is a core element of the Company's business model that provides the Company with an opportunity to improve its returns and recycle its cash for further investment. The Company therefore actively seeks to identify, and capture if beneficial circumstances prevail, opportunities as part of its ordinary course of business.

Rabigh Arabian Water and Electricity Company ("RAWEC")

RAWEC is an independent water, steam & power producer, supplying essential utilities on a captive basis to Petro Rabigh Company in Saudi Arabia as the offtaker under a long-term off-take agreement.

On 3 June 2024, ACWA Power (through its wholly owned subsidiary) entered into a Sale Purchase Agreement ("SPA") with Hassana Investment Company for the sale of a 30% stake in its wholly owned subsidiary RAWEC without loss of control for an aggregate consideration of SAR 835.1 million. Legal formalities with respect to this transaction were completed during the nine-month period ended 30 September 2024. The Group recognised an increase in non- controlling interests ("NCI") of SAR 755.9 million and an increase in equity attributable to owners of the parent of SAR 51.3 million. The difference between carrying amount of RAWEC sold and the consideration received is recorded directly within equity.

ACWA Power effectively holds 69% shareholding in the project after the sale transaction.

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ACWA POWER

3Q & 9M 2024 Interim Investor Report

For the three and nine-months periods ended 30 September 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
Parent Net Debt and Net Debt Ratio	Semi-annually	Non-IFRS

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

	Third Quarter (3Q)			YTD September 2024
2024	2023	% change	2024	2023	% change

Operating income before impairment	976	814	19.9%	2,365	2,103	12.5%
loss and other expenses

Source: Reviewed financial statements

For the nine months period ended 30 September 2024 ("9M2024")

Operating income before impairment loss and other expenses for 9M2024 was SAR 2,365 million and 12.5%, or SAR 262 million, higher than SAR 2,103 million of 9M2023.

ACWA Power Investor Relations	10
www.acwapower.com | [e-mail]