TAQA, ADNOC, and Mubadala Complete Landmark Transaction for Stake in Masdar Clean Energy Powerhouse

Abu Dhabi, UAE – 08 December 2022: Abu Dhabi National Energy Company (TAQA), Mubadala Investment Company (Mubadala) and Abu Dhabi National Oil Company (ADNOC) announced today the successful completion of the Masdar transaction, following which they will all become shareholders in Abu Dhabi Future Energy Company (Masdar) – Abu Dhabi’s flagship clean energy company.

This transaction – first announced in December last year by His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates – sees three Abu Dhabi champions combining their efforts to rapidly grow Masdar on a global scale under an expanded mandate covering renewable power, green hydrogen and other enabling clean energy technologies.

TAQA is taking the leading role in Masdar’s renewable business with a 43% shareholding, while Mubadala retains 33% and ADNOC holds 24%. ADNOC is taking the leading role in Masdar’s green hydrogen business with a 43% stake, Mubadala holding 33%, and TAQA 24%. The partnership sets out to develop Masdar into a global clean energy powerhouse that consolidates the renewable energy and green hydrogen efforts of TAQA, Mubadala, and ADNOC under a refreshed single Masdar brand. TAQA paid USD 1.02 billion [AED 3.7 billion] in cash for its stake.

Mubadala established Masdar in 2006 to extend the UAE’s leadership role in the global energy sector, while helping drive the nation’s economic diversification and climate action agenda. Today, Masdar is active in more than 40 countries across six continents and has developed and invested in worldwide projects with a combined value of over USD 20 billion.

Under the new partnership, Masdar will become a national clean energy champion for the UAE and has an ambitious target of growing to at least 100GW of renewable energy capacity globally by 2030. The largest share of this capacity will come from wind and solar technologies. Beyond its initial goals, the company aspires to develop in excess of 200 GW of renewable energy, reinforcing its position as a world leader in the renewable energy sector.

In addition, Masdar’s new green hydrogen business will rapidly scale up and target an annual green hydrogen production capacity of up to 1 million tonnes by 2030, equivalent to saving more than six million tons of CO2 emissions. Green hydrogen, which is produced using water and renewable energy, is fast emerging as an important carbon-free fuel for the decarbonisation of hard to abate sectors such as heavy industry. It is expected to play a critical role in meeting the world’s net zero aspirations, with Masdar and the UAE set to take a leading role in the hydrogen economy.

The new Masdar will target growth opportunities around the world including in the US, MENA, CIS, APAC, and key European countries as well as playing a central role in providing the clean energy needed for the UAE to achieve its own 2050 net zero target. Growth is expected to come from a combination of new and existing projects, as well as acquisitions.

His Excellency Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology, Managing Director and Group CEO of ADNOC, and Chairman of Masdar said: “As the founding CEO of Masdar, I am excited to see Abu Dhabi’s energy leaders coming together to take Masdar to the next level. The Masdar clean energy powerhouse will unlock a new chapter of growth, development, and opportunity for renewable energy and green hydrogen projects, both in the UAE and worldwide. As the UAE delivers on its Net Zero by 2050 strategic initiative and prepares to host COP28 next year, by leveraging the skills and experience of its partners, Masdar will build on its rich legacy as a pioneer in the renewable energy sector, accelerate the delivery of world-scale projects, and help meet the world’s growing demand for clean energy. For ADNOC, our participation in Masdar is an important pillar in our strategy to expand clean energy production, unlock new opportunities for industrial development and drive decarbonization.”

His Excellency Khaldoon Khalifa Al Mubarak, Managing Director and Group Chief Executive Officer of Mubadala said: “We established Masdar 16 years ago based on an early conviction that building capabilities and supporting innovation and scale across the clean energy spectrum would be transformative for the nation and an investment in future generations. Today, Masdar is one of the world’s fastest-growing renewable energy companies. This significant milestone helps unlock synergies in Masdar’s continued growth journey and the UAE’s global energy leadership.

Al Mubarak added: “Global cooperation is vital to achieving the critical scale in clean energy sources, and we are committed to leveraging our partnerships to enable Masdar to deliver a broader global impact.”

His Excellency Mohamed Hassan Alsuwaidi, Chairman of TAQA said: “This transaction marks the start of Masdar’s journey towards becoming one of the largest clean energy companies in the world, backed by three of the UAE’s energy and investment pacesetters. Over the next decade, Masdar will rapidly expand its renewable energy and green hydrogen investments to accelerate decarbonization. Last year, TAQA committed to a renewable energy share of 30% of its total power generation capacity by 2030. Our stake in Masdar is a key part of delivering on this target, while supporting the UAE’s ambition to cut greenhouse gas emissions and be a driving force in the global energy transition. Today, we stand as one of the largest integrated utility players in Europe, the Middle East, and Africa. Tomorrow, we will be known as a pan-regional low carbon power and water champion.”

Alongside the completion of the transaction, a new Board of Directors has been appointed for Masdar’s renewable business with His Excellency Dr. Sultan Ahmed Al Jaber reappointed his position as Chairman. Members include:

H.E. Mohamed Hassan Alsuwaidi, Deputy Chairman

Jasim Husain Thabet, Board Member

Farid Al Awlaqi, Board Member

Khaled Salmeen, Board Member

Musabbeh AlKaabi, Board Member

Ahmed Saeed Al Calily, Board Member

Dr. Bakheet Saeed Al Katheeri, Board Member

Mohamed Jameel Al Ramahi will continue as Chief Executive Officer (CEO) of the enlarged Masdar.

As part of the deal, TAQA will offer to contribute its ownership interests in future Abu Dhabi renewable power projects to Masdar. Masdar City, Abu Dhabi’s flagship sustainable urban development, will continue to remain under Mubadala’s ownership as the sole shareholder.

TAQA Group Reports AED 15 billion Net Income for first Nine Months of 2023 and Refreshed 2030 Growth Targets

Abu Dhabi, UAE – 13 November 2023: Abu Dhabi National Energy Company PJSC (“TAQA”, the “Group” or the “Company”), one of the largest listed integrated utilities in Europe, the Middle East and Africa, reported its earnings for the period ending 30 September 2023 and unveiled revised growth targets that will see the Group accelerate the development of new power and water generation assets while maintaining its transmission and distribution infrastructure investments. The updated investment plan also targets a higher share of renewables within its portfolio by 2030.

Building upon its 2021 growth strategy, the revised growth targets see TAQA aiming for 150 gigawatts (GW) of gross power generation by 2030, up from the previous target of 50 GW, with around 65% of its generation capacity coming from renewable power sources. Previously, TAQA had committed to a target of 30%; however, with its leading stake in Masdar’s renewable energy operations, the Group has upgraded this target. On a standalone basis, Masdar’s clean generation capacity is expected to reach 100 GW by 2030. In terms of net power generation capacity, TAQA is set to reach 50 GW by 2030, up from its current net capacity of 17 GW.

TAQA is also ramping up its growth targets for water generation with a plan to increase the Group’s water generation capacity to 1,300 MIGD, with two-thirds of this capacity coming from the highly efficient and low carbon reverse osmosis (RO) technology. Currently, TAQA’s desalination capacity sits at just over 1,180 MIGD.

To facilitate the development of future projects and associated infrastructure networks, TAQA is planning to invest AED 75 billion until 2030 towards power and water capacity expansion and UAE-based transmission and distribution networks. This figure includes the previously committed spend of AED 40 billion between 2021 and 2030 to grow its UAE transmission and distribution networks.

TAQA is also actively seeking to expand its Transmission and Distribution business beyond the UAE through both inorganic and organic opportunities.

In the first nine months of 2023, TAQA delivered a solid financial performance driven by strong and stable returns from its long-term contracted utilities business whilst it has remained focused on delivering its growth strategy.

Financial highlights:

  • Group revenues were AED 39.5 billion, unchanged versus the prior-year period, as higher pass-through bulk supply tariffs and transmission use of system within the Transmission and Distribution segment offset a decline in Oil and Gas revenue.
  • Adjusted EBITDA was AED 15.3 billion, down 11%. This fall was led by a decline in contribution from the Oil and Gas segment on the back of lower realised oil and gas prices and reduced production.
  • Net income (TAQA share) was AED 15.0 billion, an increase of AED 8.5 billion, driven by a one-off gain of AED 10.8 billion recognised on the acquisition of a 5% shareholding in ADNOC Gas, in part offset by a one-off AED 1.2 billion deferred tax liability associated with the introduction of UAE corporate income tax from 1 January 2024. Net income excluding these one-off items was AED 5.4 billion, 17% lower than the prior period, mainly due to lower contribution from the Oil and Gas segment.
  • Capital expenditure was AED 3.3 billion, 34% higher than the prior year, as project execution picked up pace in the Transmission and Distribution segment.
  • Free cash flow generation was AED 10.2 billion, 20% lower compared to the previous year. The decline was driven by lower contribution from the Oil and Gas segment.
  • Gross debt was AED 61.7 billion, unchanged on the amount outstanding at the end of 2022.

 

Operational highlights:

  • Generation global commercial availability was 97.9%, marginally higher than the prior-year period (where availability was 97.8%).
  • Transmission network availability for power and water was 98.4%, marginally lower than the prior-year period (98.6%).
  • Oil and gas average production volumes were 110.5 thousand barrels of oil equivalent per day (boepd), a decrease of 10% compared to 2022. This decrease is due to the enforced shutdown of operations in Iraq due to the closure of the export pipeline and the natural decline in production of late-life UK assets.
  • TAQA continued to receive recognition for its progress on ESG initiatives, with multiple agencies improving the company’s ESG rating.

 

Jasim Husain Thabet, TAQA’s Group Chief Executive Officer and Managing Director, commented: “In the first nine months of 2023, TAQA remained unwavering in its commitment to creating long-term shareholder value, delivering a steady performance on the back of strong returns from the Group’s utility business despite headwinds caused by fluctuations in commodity prices and the enforced shutdown of our production in Iraq.

I am pleased to note that we have continued to deliver on TAQA’s growth agenda with project execution across the Transmission and Distribution segment, further supported by a pickup in regulated capital expenditure. During the third quarter of 2023, we reached financial close on a USD 2.2 billion (AED 8.3 billion) sustainable water supply project in collaboration with ADNOC as TAQA continues to be a partner of choice for industrial players and their decarbonisation ambitions towards net zero. As a low-carbon power and water champion and in line with TAQA’s Green Finance Framework and ESG Strategy, we also completed the secondary listing of our dual-tranche bonds onto the ADX, including our first TAQA-issued green bond.”

On TAQA’s revised growth targets, he added: “We approach the year-end with positive momentum as TAQA continues to expand its footprint domestically and internationally in line with our revised growth targets. Our continued success and rapid expansion have made it imperative to align our targets to the evolving ambition of the business while maintaining our commitment to innovation and delivering on our promise to our stakeholders. TAQA is an excellent example of the energy transition in action as we turn ambition into tangible outcomes to support the UAE’s decarbonisation efforts. TAQA’s growth has laid the foundation for achieving sustainable growth, putting us on the path towards a low carbon future whilst maintaining attractive returns for our shareholders and helping to deliver energy security in the markets we serve.”

 

Upon approval of the financial results, TAQA’s Board of Directors also declared a third interim cash dividend for the year of 0.65 fils per share (approximately AED 731 million), in line with the Company’s new dividend policy.

Xlinks’ first-of-a-kind renewable energy project secures backing from TAQA and Octopus Energy

26 April 2023 (London, United Kingdom /Abu Dhabi, United Arab Emirates): Xlinks First Limited has reached a critical early milestone with the successful closing of an early development funding round raising GBP30 million. The investment comes after securing GBP25 million (AED113 million) of investment from Abu Dhabi National Energy Company PJSC (TAQA), one of the largest listed integrated utility companies in the Middle East and North Africa region and GBP5 million (AED22 million) from global energy technology business, Octopus Energy Group.

With this funding, Xlinks will undertake development of  plans to lay the world’s longest high-voltage direct current (HVDC) subsea cables between the UK and Morocco, passing Portugal, Spain and France as part of the Morocco – UK Power Project. It is one of a number of first-of-a-kind long-distance renewable energy generation and cross-border export project being planned globally, addressing the growing demand for firm power capacity.

Xlinks will supply the UK with 3.6GW of renewable energy-sourced electricity amounting to nearly 8% of the nation’s current requirements and enough to power seven million British homes by the end of the decade. The UK’s Department for Energy Security and Net Zero has established a dedicated team to work with Xlinks to consider the merits of the project and understand how it could contribute to the UK’s energy security.

The electricity will be generated in the Guelmim Oued Noun region of Morocco by a 10.5GW facility of solar and wind farms, supported by 20GWh/5GW of battery storage. The facility will be connected to the UK power grid in Devon, South West England, via four 3,800km subsea HVDC cables, which will be manufactured in the UK. This project will rely on the Moroccan renewable energy expertise whilst supporting its leading role globally in the fight against climate change and providing further value to its natural resources and reinforcing its renewable energy export strategy. The project will create around 10,000 jobs in Morocco during construction and lead to significant foreign direct investments in the country.

Simon Morrish, CEO of Xlinks, said: “Xlinks’ ambition is to supply British households with secure, affordable, and green energy all year round. With this investment and support from our partners TAQA and Octopus, along with the support received from both the UK and Moroccan Governments, we take another step toward achieving that ambition. The huge potential of the Morocco – UK Power Project will help the UK accelerate its transition to clean sources of power, increase energy security and reduce consumer bills.”

Jasim Husain Thabet, TAQA’s Group Chief Executive Officer and Managing Director, commented: “As a champion of low carbon power and water, TAQA’s investment in the Xlinks project shows that we are serious about helping reduce emissions whilst maintaining the security of energy supply that societies depend on. We are already working on a large scale HVDC subsea project in Abu Dhabi, and we own and operate one of the world’s largest solar PV plants. This investment offers the chance to bring both our infrastructure and renewable power expertise to the table to benefit the UK and Morocco.”

Greg Jackson, CEO and founder of Octopus Energy Group, said: “This partnership between Xlinks, TAQA and Octopus enables us to drive forward one of the most visionary energy projects in the world. When people ask ‘how will you power heat pumps and electric cars when it’s not windy?’- this is a big part of the answer. This is a new global industry, and the UK and our partners can do it first, helping cement Britain as a leader in the transition to low-cost renewable energy – bringing down bills, powering industry and creating green jobs both in the UK and Morocco.”