UAE’s Masdar considers 'transformative' acquisitions to expand in US and Europe

Company open to expanding into China at the 'right time' and with the 'right partner', top executive says

A floating solar power plant built in co-operation between the Indonesian government and Masdar. AFP

Abu Dhabi clean energy company Masdar is considering “transformative” acquisitions to expand its footprint in the US and Europe, according to its chief operating officer.

The company is “actively” screening the market not only for acquisitions, but also for greenfield and brownfield projects as well as opportunities to support small renewable energy developers, Abdulaziz Alobaidli told The National.

“Those are very attractive markets and very well-developed markets and we certainly would like to increase our footprint [there],” Mr Alobaidli said.

The US Inflation Reduction Act, which was enacted last year, offers a series of tax incentives on wind, solar, hydropower and other renewables, as well as a push towards electric vehicle ownership.

It is expected to spur about $3 trillion of investment in renewable energy technology, according to Goldman Sachs.

Meanwhile, the REPowerEU Plan aims to increase the share of renewables in the EU energy mix to 45 per cent by 2030.

Onshore solar, onshore wind, and offshore wind constitute the core investment focus for Masdar, he said. He added that that the company invests in other technologies, such as geothermal, waste-to-energy and hydropower, on an “opportunistic” basis.

Earlier this year, Masdar closed the deal to acquire a 50 per cent stake in the California-based Big Beau project from EDF Renewables.

Masdar, established in 2006, is working towards a renewable energy portfolio capacity of at least 100 gigawatts by 2030 and an annual green hydrogen production capacity of up to 1 million tonnes by the same year. It is currently active in more than 40 countries.

The company is open to expanding into China, the world’s largest renewable energy producing country, at the “right time” and with the “right partner”, Mr Alobaidli said.

“It's about opportunities … [and] prioritising your investments, based on returns, maturity of technology [and] finding the right opportunity and the right partner.”

Masdar will also continue boosting its presence in its core markets such as the Commonwealth of Independent States region, Mr Alobaidli said.

Last week, Saudi Arabia's private utility Acwa Power signed an initial agreement with Masdar, and State Oil Company of Azerbaijan Republic to develop 500 megawatts of renewable energy projects in the Central Asian country.

In October, Masdar announced the inauguration of the 230MW Garadagh Solar Park in Azerbaijan, the region’s “largest” operational solar plant.

Masdar will continue to fund its projects through the issuance of green bonds, in addition to other instruments available in the market, the renewable energy executive said.

The size of the offerings would depend on the number of projects being financed and other sources of funding available at the time, Mr Alobaidli said.

In August, the company listed its first green bond on the London Stock Exchange to fund its new projects.

Masdar completed its issuance for the $750 million green bond offering in July through the sale of 10-year senior unsecured notes. The offering was 5.6 times oversubscribed, with the order book peaking at $4.2 billion, following strong appetite from regional and international investors.

The market for green and sustainable bonds and sukuk is booming in Gulf Co-operation Council economies as governments in the oil-rich economic bloc push to meet their net-zero commitments.