ABU DHABI Dec 28 Saudi Arabia's top sovereign
wealth fund is buying a stake in United Arab Emirates utility
company Utico in a multi-million dollar deal, the chief
executive of the UAE firm told Reuters on Wednesday.
Public Investment Fund (PIF) has entered into a binding
agreement with private utility provider Utico Middle East to buy
a "significant minority stake", Richard Menezes said.
He declined to give the deal value, saying details will be
PIF has been looking at investments in Saudi and elsewhere
across a range of sectors in recent months. It hired HSBC to
advise it on a potential purchase of a stake in Riyadh-based
ACWA Power, a developer and operator of power and water plants,
sources close to the matter told Reuters in November.
The same month it said it planned to buy a major stake in
Adeptio, the Gulf-based investment firm which controls retailer
Kuwait Food Co (Americana).
"Our model of development is welcomed by Saudi Arabia that
wants to replicate it in the Kingdom," Menezes said, adding that
Utico plans to enter Saudi in partnership with PIF.
Saudi Arabia is moving toward privatising its power and
water projects and seeking to attract investors as it embarks on
a wide-reaching reform of its economy in response to lower oil
Utico, the only privately-owned utility in the UAE has a
current capacity of 31 million gallons per day (mgpd) of
desalinated water from four plants in the northern emirate of
Ras al Khaimah.
The firm is building a new plant in Ras Al Khaimah with
capacity of 24 mgpd in a joint venture with Spain's Groupo Cobra
with an investment outlay of $195.8 million. Two other existing
plants are being upgraded to add a total of 10 mgpd capacity.
(Reporting By Stanley Carvalho, editing by Louise Heavens)