Adnoc and Taqa to become shareholders in Abu Dhabi's Masdar with Mubadala

The strategic partnership will help boost Masdar's renewable energy capacity to 50 gigawatts by 2030 and create a global clean energy powerhouse

The 10-megawatt solar farm on the outskirts of Masdar City. Masdar was previously fully-owned by Mubadala Investment Company. Photo: AFP

Abu Dhabi National Oil Company and Taqa will join Mubadala Investment Company to become shareholders in Masdar, in a move that will help increase the clean energy company's renewable power capacity to more than 50 gigawatts by 2030.

The global clean energy powerhouse, launched by Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, will support the UAE’s role in the energy transition, the Abu Dhabi Media Office said in a tweet on Wednesday.

Under the partnership, both Adnoc and Taqa will become shareholders in Masdar, which was previously fully owned by Mubadala. The deal will help create a "global champion in renewables and green hydrogen", and will accelerate progress towards the UAE’s strategic goal of achieving carbon neutrality, the media office said.

"Fifteen years ago, the launch of Masdar was a landmark investment in the diversification and long-term sustainability of our energy sector. Today, a new strategic partnership between Adnoc, Mubadala and Taqa will further strengthen Masdar’s position as a global leader in renewable energy," Sheikh Mohamed said.

The move consolidates the efforts of Adnoc, Taqa and Mubadala, combining their renewable energy and green hydrogen portfolios into Masdar, leveraging the company’s strong international legacy and brand identity, Adnoc said on Wednesday.

The partnership between the three Abu Dhabi companies will have a combined current, committed, and exclusive capacity of over 23 gigawatts of renewable energy. The expanded Masdar entity is set to become one of the largest clean energy companies following the completion of the deal.

The move follows board approval for Adnoc’s "New Energies Strategy" aimed at further reducing its carbon footprint and enabling the state producer to capitalise on opportunities in renewable energy, hydrogen and other lower carbon fuels.

Adnoc plans to spend $127 billion between 2022 and 2026, of which Dh160bn will be directed towards the local economy under its five-year business plan, which will help it to achieve its and clean energy ambitions, it said on Wednesday.

The Masdar partnership builds on the creation of the Abu Dhabi Hydrogen Alliance, comprising Mubadala, Adnoc and Abu Dhabi holding company ADQ, which is a majority shareholder of Taqa.

It also follows Adnoc and Taqa’s agreement in November to form a global renewable energy and green hydrogen venture that will have a generating capacity of 30 gigawatts by 2030. The two companies will partner on domestic and international renewable energy and waste-to-energy projects, as well as the production, processing and storage of green hydrogen, they said at the time.

Collectively, the partners in Masdar will "supercharge" the company's growth and its expansion, with each shareholder playing a key role.

Upon completion of the transaction, Taqa is set to take the leading role with a 43 per cent shareholding in Masdar’s renewable energy business with Mubadala retaining a 33 per cent share and Adnoc holding a 24 per cent stake.

Adnoc will take 43 per cent shareholding in Masdar’s green hydrogen business, with Mubadala holding 33 per cent and Taqa 24 per cent, according to the statement.

“As the UAE celebrates its Jubilee, today’s historic collaboration between three Abu Dhabi powerhouses firmly places Adnoc at the forefront of the global energy transition and marks our entry into the international clean energy space," said Dr Sultan Al Jaber, Minister of Industry and Advanced Technology and managing director and group chief executive of Adnoc.

Following the deal, Adnoc plans to capitalise on many local and international renewable energy and hydrogen opportunities, he said without providing details.

The new global renewable power capacity this year is projected to rise to 290 gigawatts, with 2021 expected to set a “fresh all-time record for new installations”, the International Energy Agency said on Wednesday.

The worldwide renewable electricity capacity is forecast to rise to more than 4,800 gigawatts by 2026, a 60 per cent rise from the 2020 levels, the Paris-based organisation said in its annual Renewables Market Report.

Renewable energy is also at the heart of the UAE’s ambitions to achieve carbon-neutrality. In October, the UAE became the first country in the Middle East and North Africa to pledge to offset all of its domestic carbon emissions by 2050, followed by Saudi Arabia and Bahrain.

The country, the Arab world’s second-largest economy, plans to invest $160bn over the next three decades to accelerate the development of the renewable energy sector.

The Emirates will also host the 28th Conference of the Parties in 2023 in line with the global efforts to transition away from fossil fuels.

Masdar, which is at the centre of the UAE’s efforts to boost clean energy, is also a major global player in the renewable energy sector.

Since its inception a decade-and-a-half ago, Masdar has established itself as a “global pioneer across the clean energy and sustainability landscape", Dr Al Jaber said.

"This bold and forward-looking strategic partnership will bolster Masdar’s position both locally and globally and is yet another example of how Adnoc has successfully developed a national and international partnership model, through smart, creative and innovative approaches that are creating additional value and driving sustainable growth for Abu Dhabi and the UAE.”

Dr Al Jaber will remain chairman of the expanded Masdar entity that will cover both renewables and green hydrogen business areas, the statement said.

Masdar is looking to develop new projects in Malaysia, Vietnam, Indonesia and Taiwan, and is bullish on new opportunities in Uzbekistan, Kazakhstan, Azerbaijan and Armenia.

It has actively pursued deals to expand its portfolio and its footprint across geographies and markets. In November, the company signed a deal with the government of Armenia to develop a 200-megawatt solar photovoltaic plant, which will be the West Asian nation's largest utility-scale solar facility.

In October, Masdar and Iraq’s Ministry of Electricity and National Investment Commission signed an agreement to implement the first phase of solar projects that will boost the country's goal of generating 20 per cent to 25 per cent of its energy from renewables, equivalent to 10-12 gigawatts by 2030.

In September, Masdar received investment grade A2 and A+ ratings from Moody’s Investors Service and Fitch Ratings, respectively, marking the first time the company was rated by global agencies.