As chief executive officer and president of ACWA Power, Paddy Padmanathan spends a lot of his time travelling Â so much so that the company’s staff can’t give a straight answer to the question of where he is based. This is hardly surprising, however, given that the company has been rapidly expanding its global footprint during recent years.
Although founded and headquartered in Saudi Arabia, the developer, investor, co-owner, and operator of power-generation and desalinated water-production plants now has 50% of its assets outside of the kingdom, and is presently undertaking – and planning to undertake – several projects in other countries.
These include a 50-megawatt (MW) photovoltaic (PV) plant in Jordan that is about to go into construction; and two PV plants of similar capacity in Egypt, both of which are currently in the financing stage.
The company also has under-construction projects in Oman, including a coal plant and a natural gas-fired power plant, and is waiting for the next tender for the Salalah 2 project.
In Morocco, it has broken ground on the NOOR Ouarzazate IV plant, the first phase of the NOOR PV 1 programme, and is awaiting the issuance of a request for proposal (RFP) for a gas-to-power project.
In the UAE, ACWA Power is preparing the tender for a 200MW concentrated solar power (CSP) plant, the first phase of the 1,000MW CSP project planned for the Mohammed bin Rashid Al Maktoum Solar Park. The CSP plant is based on the independent power producer (IPP) model, as was the recently inaugurated 200MW Phase 2 of the park, of which ACWA Power was the main developer.
Padmanathan, it turns out, is a huge supporter of the IPP model, telling Construction Week that it is a cost-effective way to deliver energy, since the private sector has always displayed more perspicacity when it comes to keeping costs down on energy projects than the public sector.
“No matter where in the world, when governments buy, they buy expensive,” he says. “Part of it has to do with not wanting to make a mistake, so they over-specify. Part of it has to do with the private companies supplying to the government. Those companies probably think to themselves: These guys are going to pay me late, or interfere while I’m supplying. So they put these contingencies and buffers [in place].”
He explains that for those reasons and others, it has become “a universal rule” that when a government buys, it ends up spending more.
“But when the private sector buys, it squeezes. It fights with the supplier and negotiates the best price,” he continues. “So the capital cost itself, in the case of the government, tends to be higher to start with. And you will also find, when comparing MW to MW, that private-sector-run plants are always more efficient than those run by the government.”
Padmanathan points out that for those in the private sector, money talks, which is why they value operational efficiency. “I need to make sure that the plant is working, and that it continues to work at the contracted level, otherwise, I don’t get the money.”