IFC Investment in International Company for Water and Power Projects (ACWA) 

(MENA Region)

United States Position

December 3, 2013

While the United States appreciates this investment’s focus on renewable energy, the United 

States believes that this project lacks sufficient additionality to justify IFC’s investment, and is 

inconsistent with the Bank Group’s core corporate goals to end extreme poverty and promote 

shared prosperity. In addition, the United States found the environmental and social impact 

analysis to be insufficient. 

The United States appreciates that this project will help the company accelerate its 

diversification into renewable energy and increase its investments in the non-GCC MENA 

region. This rapid expansion into solar and wind investments will help the region meet its 

quickly-growing demand for energy in a sustainable manner. The United States supports Acwa’s 

efforts to increase the share of renewable energy to 5-10 percent of its power generation 

portfolio, and hopes that it will continue to expand its operations in solar and wind projects. 

Additionally, the large investments in the non-GCC MENA region send a positive signal to 

investors at an important moment in the region’s political transition. The United States supports

the IFC’s work to increase its investments in this region, including through jointly-financed 

projects with Gulf investors in non-GCC MENA countries, as these contribute to strengthening

investor confidence and mitigate perceived political risk. 

At the same time, the United States notes that the majority of the Company’s assets and 

future renewables investments are in Saudi Arabia and other GCC countries, which calls 

into question the alignment of this investment with the Bank Group’s twin corporate goals

to end extreme poverty and promote shared prosperity. The United States believes that the 

company would be able to access commercial financing without the need for IFC support. The 

United States also questions how this investment fits with the Bank’s commitment to greater 

selectivity and development impact. 

The United States is also concerned about the environmental impact analysis and 

disclosure of future assessments for Category A projects. The United States recognizes that 

IFC’s board seat on Acwa will allow the IFC to monitor implementation and compliance with 

the performance standards across Acwa’s portfolio. This oversight and knowledge-sharing role 

would presumably strengthen the environmental impact assessment and management for all 

future projects. However, the United States continues to believe that a 120-day disclosure period 

is best practice, particularly in the cases of financial intermediary investments that will likely 

support a number of Category A projects. 

Separately, the United States is troubled by the greenfield coal projects that make up part 

of the company’s portfolio and proposed pipeline. Despite IFC’s efforts to ring-fence its 

financing, the United States is not convinced that an equity investment can preclude

support for specific projects within the company’s portfolio because money is fungible. 

IFC’s seat on the Acwa board will not give the IFC direct influence over future projects, and thus 

will not allow IFC to prevent or discourage Acwa from pursuing additional coal projects in the 
future. To prevent IFC funds from supporting coal projects, the United States would have 

preferred that the IFC take a different investment approach to support Acwa’s renewables 

projects while avoiding the association with the coal projects altogether, perhaps by investing 

directly in specific projects or by using a special purpose vehicle. 

In conclusion, the United States wishes to be recorded as voting no on this investment due to our

fundamental concerns about the lack of strong additionality and the inconsistency with the World 

Bank Group’s goals, and the inadequate analysis of environmental and social impacts. The 

United States also wishes to be on record as discouraging equity investments when a company’s

investment pipeline includes high risk projects such as coal.