TAQA eyes foreign investments for large scale projects

Abu Dhabi National Energy Company (TAQA) will advance the UAE’s aim of improving the renewable energy in the country and “selectively seek” investment opportunities abroad, following its asset swap agreement with state-owned ADPower.

In its transformation report, the company clarifies that the transaction provides a solid forum for TAQA to evaluate opportunities across its generation and transmission components to meet the increased demand for water and power in the UAE.

“Internationally, we will follow a disciplined approach and investment assessment framework, focusing on select opportunities with attractive risk-adjusted returns,” the company said.

Taqa will be looking for investments in large-scale projects that match its core competencies, including those in markets where it is present. They would also look into the establishment of new collaborations to reach new markets, the firm added.

Taqa’s agreement with ADPower, signed last month, established one of the largest utility companies in Europe, the Middle East and Africa with assets worth a whopping $54 billion.

In return for more than 106.3 billion new shares, ADPower transferred a majority of its water generation, transmission and distribution assets to Taqa, substantially improving Taqa’s asset base and financial profile.

Taqa currently boasts of a capacity to produce 23 gigawatts of power and about 900 million imperial gallons of water generation capacity per day (MIGD). According to the strategy report, the company is now Abu Dhabi ‘s biggest transmission firm with significant networks in six emirates.

Taqa is now targeting 20% share of solar power and about 50% share of reverse osmosis in its capacity to generate by 2030, “further strengthening our clean energy credentials,” the report said.

A consortium led by Taqa and Masdar, in collaboration with France’s EDF and JinkoPower, won the tender earlier this month to build the world’s largest solar power plant in Abu Dhabi with a total capacity of 2 gigawatts.

Financial closure of the project is scheduled for the third quarter of this year, and will raise the solar power capacity of Abu Dhabi to about 3.2 Gigawatt once the plant is fully operational.

Taqa also made a $245 million push last month when its subsidiary, Abu Dhabi Distribution Company was awarded two projects to boost its recycled water delivery program. The schemes will have a combined transmission power to generate about 85 MIGD of recycled water, which is enough to irrigate more than 3.5 million palm trees.

Taqa, which in the past has concentrated on oil and gas, said its existing international oil and gas assets will become a smaller portion of its overall portfolio, due to its “substantial new scale in the utility space” and more growth opportunities within the segment.

The reduction will “significantly increase our resilience to commodity price volatility”, it said.

“We will continue to improve operating efficiencies within the oil and gas business line to maximize short-term value while seeking long-term strategic solutions.”