ADNOC, TAQA to Buy Stakes in Masdar

ADNOC, TAQA to Buy Stakes in Masdar

/ Financial News / Wednesday, 22 June 2022 11:59

Abu Dhabi National Energy Company (TAQA), Abu Dhabi National Oil Company (ADNOC) and Mubadala Investment Company (Mubadala) have entered into binding agreements for TAQA and ADNOC to purchase stakes in Abu Dhabi Future Energy Company (Masdar) from Mubadala.

This is a major milestone towards completing the transaction announced last year by His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of the United Arab Emirates for a global clean energy powerhouse comprising of TAQA, Mubadala and ADNOC intended to spearhead the drive to net-zero carbon by 2050 under Masdar brand.

The transaction puts a value for the new Masdar joint ventures at approximately AED 7 billion ($1.9 billion) on a 100% equity basis. Under the deal, TAQA acquires a 43% controlling stake in Masdar’s renewables business with Mubadala retaining a 33% interest, and ADNOC owning the remaining 24% interest.

Meanwhile, ADNOC will hold a 43% controlling stake in Masdar’s new green hydrogen joint venture, Mubadala will retain a 33% interest and TAQA will hold a 24% effective stake. TAQA will contribute its rights to a minimum 40% share in future Abu Dhabi renewable projects and green hydrogen projects.

Jasim Husain Thabet, TAQA’s Group Chief Executive Officer and Managing Director said, “Signing of binding agreements for this transaction demonstrates how TAQA has firmly established itself as a low carbon power and water champion. At the completion of this transaction TAQA will exceed its 2030 targets of having more than 30% of its generation capacity from renewable energy and will accelerate our future growth plans as the demand for renewable power and green hydrogen projects significantly increase. Working closely with Mubadala and ADNOC we will transform the energy landscape through Masdar, grounded in collaboration and great ambition to drive forward the UAE’s ‘Net-Zero by 2050 Strategic Initiative’.”

Khaled Salmeen, Executive Director of the Downstream Industry, Marketing & Trading Directorate, ADNOC said, “Signing of the binding agreements for this landmark transaction marks another important milestone in ADNOC’s ongoing journey to future proof its operations and grow its new energies business.”

Musabbeh Al Kaabi, CEO, UAE Investments of Mubadala Investment Company said, “This milestone is a clear testament of Mubadala’s commitment to realizing the UAE’s long-term sustainability ambitions. We established Masdar 16 years ago with the foresight to diversify the UAE’s energy mix and advance the global energy transition. Signing the agreement with two of Abu Dhabi’s key energy players, ADNOC and TAQA, further cements Mubadala’s responsible investing strategy and is one step closer to delivering on the UAE’s sustainability aspirations. The new shareholding structure of Masdar solidifies the strategic partnership between Abu Dhabi’s powerhouses, consolidating the UAE’s pioneering position as a forward-looking global energy leader.”

Since its inception in 2006, Masdar has established itself as a global leader in the commercialisation of clean technology by investing in renewable energy projects valued at more than $14.3 billion globally; developing a gross capacity of over 5 gigawatts (GW) of renewable energy projects worldwide, either in operation or under development; and displacing up to 5.4 million metric tonnes of carbon dioxide emissions per year

The transaction is still subject to the completion of necessary transaction requirements, including obtaining relevant third party and regulatory approvals, expected to take a number of months.

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