Taqa announces green pivot

UAE utilities group Taqa has announced a ten-year plan for transforming itself into a "champion for low-carbon power and water," while reducing its exposure to oil and gas markets.

The strategic plan "places at its core the global acceleration of the energy transition," Taqa said in a statement on March 24. The company will improve efficiency from its existing assets while seeking to meet increased demand for power and water in the UAE and exploiting "selective" opportunities overseas.

"Taqa's business will be anchored in ESG principles and practices," it said. "As part of that commitment the company is working to develop and publish greenhouse gas emission reduction targets."

However, Taqa will also focus on financial strength, protecting its credit rating and delivering on its dividend policy. It still expects to launch a follow-on public offering of its shares, following a recent decision to allow foreign investors to own up to 49% of Taqa's issued shares.

The company aims to expand its power generation capacity in the UAE from 18 GW to 30 GW, and establish up to 15 GW of capacity internationally. Renewable energy will be the focus, with solar power alone expected to account for 30% of Taqa's generation capacity by 2030. The company will also expand use of reverse osmosis technologies to make up two-thirds of its desalination capacity by 2030, with some 200mn gallons/day of capacity already under construction.

Taqa will meanwhile "focus on commercially viable opportunities to reduce exposure to the hydrocarbon sector" though continuing "to pursue top quartile operations performance." The company's capital allocation will be "highly selective."

The firm will also invest some 40bn UAE dirham ($10.9bn) in transmission and distribution in the UAE, boost efficiency in the sector and provide new demand-side management services to help customers save energy.

"Taqa has the support of our shareholders for this new strategy and is on its way to become the recognised low carbon power and water champion from Abu Dhabi, and this strategy sets out how the company will achieve this ambition," chairman Mohamed Hassan Al Suwaidi said.