Masdar Plans Acquisitions as It Continues to Expand Its Portfolio

Abu Dhabi’s clean energy company Masdar is looking at acquisitions in different countries and is aiming to reach 100 gigawatts of renewable capacity in the next 10 years, as it continues to expand its operations.

The company is currently active in more than 40 countries with a total renewable capacity of 15 gigawatts and is “assessing” new opportunities to boost its portfolio, Fawaz Al Muharrami, acting executive director of clean energy at Masdar, told The National.

“We are looking at different opportunities in different parts of the world … we are looking if there is a good opportunity in Europe, in Apac [Asia-Pacific] and will be seeking to acquire those projects,” Mr Al Muharrami said.

Masdar, with investments worth $20 billion globally, is rapidly expanding its renewables portfolio as countries focus on cutting emissions to limit global warming.

This year, it signed a number of new agreements to explore and develop renewable energy and green hydrogen projects after increasing its global clean energy portfolio capacity by 40 per cent in 2021.

Earlier this week, the company signed a preliminary agreement with Germany’s RWE Renewables to collaborate and explore the development of offshore wind projects in key markets.

Last month, it signed a new deal with Tanzania Electric Supply Company (Tanesco) to develop renewable energy projects with a combined total capacity of up to two gigawatts in the East African country.

“With new shareholders entering Masdar, basically, Adnoc [and] Taqa … Masdar is drafting a completely whole new strategy for the growth of the company,” Mr Al Muharrami said.

“This means that the company will grow in the coming 10 years, reaching a capacity of up to 100 gigawatts.”

In June, Abu Dhabi National Energy Company — better known as Taqa — Abu Dhabi National Oil Company and Mubadala Investment Company entered into binding agreements through which Taqa and Adnoc will acquire stakes in Masdar from Mubadala.

As part of the deal, Taqa will acquire a 43 per cent controlling stake in Masdar’s renewables business, with Mubadala retaining a 33 per cent interest and Adnoc owning the remaining 24 per cent.

In Masdar’s new green hydrogen joint venture, Adnoc will hold a 43 per cent controlling stake, Mubadala will retain a 33 per cent interest and Taqa will hold a 24 per cent share.

“The key focus will primarily be on renewables, mainly solar and wind, but we are also developing waste-to-energy plant and [looking at] some geothermal project opportunities in the near future,” Mr Al Muharrami said.

The company also plans to focus on hydrogen as the demand for clean fuel rises globally amid decarbonisation efforts.

Hydrogen is “something which we have been developing for the past one year and we have now signed [memorandums of understanding] to develop green hydrogen projects in the UAE and Egypt … we are looking for collaboration with different entities in order to make ... large scale hydrogen projects in future”.

In the UAE, Masdar is teaming up with Fertiglobe¸ the Abu Dhabi-based chemicals joint venture of energy major Adnoc, Netherlands-listed OCI and France’s Engie, to co-develop a green hydrogen facility in the Emirates for the production of ammonia.

As part of the agreement signed earlier this year, the three companies will study the development, design, financing, procurement, construction, operation and maintenance of an industrial-scale and globally cost-competitive green hydrogen facility in Al Ruwais with a potential capacity of up to 200 megawatts.

Green hydrogen is derived from renewable sources. There are also other forms of hydrogen including blue and grey hydrogen, which are produced from natural gas.

Masdar is also developing new green hydrogen production plants in Egypt along the Mediterranean coast and in the Suez Canal Economic Zone.

“All those projects are going to be project financed, so they are going to be financed through either development banks or commercial banks in the countries, depending on where you are developing these projects. There will be an element of equity as well,” Mr Al Muharrami said.

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In Saudi Arabia, the Arab world’s largest economy, Masdar plans to bid for new renewable energy projects announced by the kingdom recently.

The company has two projects in the kingdom including the 400MW Dumat Al Jandal wind project, which is operational, and a 300-megawatt South Jeddah solar project, which is currently under construction and will be completed by early next year.

The kingdom this week launched five new renewable energy projects with a total capacity of 3.3 gigawatts, including three wind projects and two solar schemes.

Masdar is going to “definitely participate in that tender”, Mr Al Muharrami said.

The company is also developing the world's largest solar plant at Al Dhafra in Abu Dhabi with a capacity of two gigawatts. It is expected to be operational at the beginning of next year.

“We have already established a footprint in different parts of the world but now we are going to consolidate those efforts and try to expand more in those geographies.”