Saudi Arabia’s ACWA (formerly ACWA Power) recorded significant insurance and contractor claim recoveries in 2025 related to performance issues at its Noor III CSP Independent Power Project (Noor III CSP IPP) in Morocco, according to the company’s 2025 investor report.

The disclosures show that a group subsidiary settled a 318 million riyals ($84.75 million) claim with the Engineering, Procurement and Construction (EPC) contractor related to delays and performance issues during commissioning and early operations at the concentrated solar power plant (CSP) project.

In addition, the subsidiary finalised an insurance recovery of SAR 246 million ($65.56 million) to cover historical losses caused by plant performance problems.

The net impact of the EPC settlement and insurance recovery attributable to ACWA amounted to about SAR 423 million ($112.7 million) in 2025, compared with SAR 45 million ($11.99) in 2024, reflecting the positive effect of claim recoveries.

Noor III CSP IPP is 75 percent-owned by ACWA and 25 percent by MASEN.

The EPC settlement and amounts were recorded under performance liquidated damages and insurance income, which rose to SAR 661.8 million in 2025, compared with SAR 60.5 million in 2024, the report showed.

Impairment reassessment

In the same period, the subsidiary recognised an impairment loss of SAR 404.4 million ($107.66), of which SAR 303 million ($80.75 million) relates to ACWA’s share, after reassessing the recoverability of finance lease receivables linked to the project.

The company said the impairment also reflects additional capital expenditure, including the construction of a new molten-salt storage tank, following revisions to certain generation assumptions for the plant.

In March 2024, ACWA Power confirmed a forced outage at the Noor III CSP IPP caused by a leak in the molten-salt hot tank, a key component of the project’s thermal storage system. The outage required repair works including construction of a replacement tank, with operations resuming in the early 2025. The project company had then recognised an impairment loss of SAR 191.6 million in 2024 (ACWA share SAR 143.7 million).

The 150-megawatt (MW) concentrated solar power plant, which cost about $862 million, was built under an EPC contract by a consortium including SENER, SEPCO III, and PowerChina.

A February 2024 Reuters report had noted that technological problems stopped all output at a 150 MW plant in Noor Ouarzazate complex for a year from summer 2021 without identifying the plant.

(Writing by P Deol; Editing by Anoop Menon)

(anoop.menon@lseg.com)

Subscribe to our Projects' PULSE newsletter that brings you trustworthy news, updates and insights on project activities, developments, and partnerships across sectors in the Middle East and Africa.