Taqa signs agreements with Uzbekistan to explore power sector investments worth $3bn

Abu Dhabi company to evaluate opportunities in new and existing power plants, plus associated infrastructure

Taqa last year announced plans to invest in the privatisation of two gas-fired power plants in Uzbekistan. Victor Besa / The National

Abu Dhabi National Energy Company, better known as Taqa, has signed agreements with the government of Uzbekistan to explore investment options in the Central Asian country’s power sector that could be worth more than $3 billion.

Taqa is looking at investment opportunities including new and existing power plants as well as associated power infrastructure in the country, it said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

The Abu Dhabi company has signed a strategic framework agreement and an implementation agreement with Uzbekistan’s Ministry of Energy and the Ministry of Investment, Industry and Trade that are aimed at helping Uzbekistan achieve its sustainable development goals.

“Working together we can accelerate the sustainable development of the country’s power sector and build on the strong relationship between our two countries,” said Jasim Thabet, Taqa’s group chief executive and managing director.

The deal will help Taqa in expanding its international portfolio and “strengthening our position as a global utilities leader”, he added.

Uzbekistan is pushing to improve its energy and power generation sectors, harnessing its natural resources and seeking investments from overseas.

It is implementing a multi-phase transition from a state-owned and subsidised energy sector to a competitive gas, oil and electricity market with significant private sector participation, a move that is expected to provide huge economic benefits, according to the International Energy Agency.

The country also plans to raise the share of renewable energy in total electricity supply to 25 per cent by 2030, from 10 per cent in 2020.

Taqa said the implementation agreement includes proposals for a greenfield combined cycle power plant with a capacity of approximately 1.5 gigawatts.

It is expected to cover the design, financing, engineering, procurement, commissioning, testing, ownership and operation of the power plant by Taqa.

The planned project is set to be developed next to the Talimarjan power complex, where Taqa has already announced plans to invest in the privatisation of two gas-fired power plants.

Taqa, along with Mubadala Investment Company, are each acquiring a 40 per cent stake in the power stations with a combined capacity of 1.6 gigawatts, and will take over the associated operations and maintenance activities, the Abu Dhabi entities said in a September.

They did not disclose the value of the deal at the time.

The new agreements will also explore opportunities to invest in existing and future greenfield gas-fired power generation plants with a combined capacity of more than 3 gigawatts along with electricity transmission and distribution infrastructure in Uzbekistan.

The new partnerships are in line with Taqa's 2030 growth strategy.

The utility last year announced plans to invest Dh40 billion ($10.9 billion) in infrastructure development as it looks to add about 27 gigawatts of power capacity by the end of the decade and expand its renewables portfolio.

Taqa has significant investments in power and water generation and transmission and distribution assets, as well as upstream and midstream oil and gas operations.

Last week, Abu Dhabi’s clean energy company Masdar also signed a joint development agreement with Uzbekistan to develop more than 2 gigawatts of solar and wind projects in the country.

The company will also develop 500 megawatt hours of battery energy storage at multiple sites across the country.