Abu Dhabi National Energy Co. has revealed plans to invest more than $3 billion in Uzbekistan’s energy sector. The UAE-based energy holding firm is reportedly interested in its power plants. It's working to bolster these stations, both new and existing ones. It’s a big boost to the former Soviet country.
The Abu Dhabi National Energy Co. is also known as TAQA. It’s listed on the Abu Dhabi Stock Exchange as a water and energy company.
It also recently signed a strategic agreement with the government of Uzbekistan. It was a momentous ceremony. The two parties plan to explore investment opportunities with the power sector. It will also launch projects in the same vein.
Working for Better Energy Systems
One possible project that could come out of this collaboration is a power plant. It will be a greenfield-combined cycle power plant with a 1.5 gigawatts capacity. It’s projected to become developed beside the Talimarjan power complex. TAQA has already set up two gas-fired power stations in the area.
TAQA is also expected to handle everything related to the power station’s design. It's a condition under their new agreement with the Uzbek government. They will also manage the engineering, financing, and procurement aspects. TAQA will also be responsible for its outsourcing and testing. They’re expected to become accountable for their ownership and operation as well.
The flagship company also closed various agreements with several existing power plants. TAQA also signed a few deals with other new gas-fired power plants. Their total capacity is over 3 GW.
TAQA also signed agreements on electricity transmission in the Central Asian country. These also included the distribution infrastructure.
The investment agreement was then signed by Azim Akhmedkhadjaev and Sarvar Khamidov. The former is the Uzbek First Deputy Minister of Energy. The latter is the Deputy Minister of Investment. TAQA Group CEO Jasim Husain Thabet signed up for the energy company.
Thabet said they can hasten the sustainable development of Uzbekistan’s power sector. Especially if both parties work together. He added the agreement also serves to further strengthen the countries' bonds. He noted that the UAE and Uzbekistan already have a robust relationship.
TAQA’s director also said working with Uzbek’s top agencies helps their portfolio. It allows the company to expand its international ledger. It also enhances its position as a leader in global utilities.
Deputy Minister Shukhrat Vafaev agreed with Thabet’s sentiment. He said the new partnership and the proposed projects enhance existing opportunities. The deputy of investments also said these are also founded on their common vision. This is to bolster the energy sector. The two countries also believe in investing in reliable and sustainable energy services.
There were several other projects signed during the ceremony. Masdar, ADNOC, and Mubadala signed a joint development agreement (JDA) with Uzbekistan. They'll work with its Ministry of Energy (MoE). It will also collaborate with the Ministry of Investments, Industry, and Trade (MIIT). They will develop more than 2 GW of solar and wind projects. They’re also set to develop 500 megawatt-hours of battery energy storage. These will rise at different sites across the country.
Burgeoning Relations with the Middle East
Uzbekistan has been developing good relations with countries in the Middle East. The country signed an agreement with Saudi Arabia earlier this month. The country inked deals with Saudi’s ACWA Power. These are for energy projects amounting to over $120 million. It was also another way to strengthen the relations between the two countries.
ACWA Power announced in April that it will build two wind farms in Uzbekistan. It will become financed by a loan from the Asian Development Bank to the tune of $174 million.
The agreement comes on the heels of a $2.5 billion deal signed with the National Electric Grid of Uzbekistan. The deal is to establish three solar photovoltaic projects in the country. These solar power plants will be in Bukhara, Samarkand, and Tashkent.
Strong Start for TAQA
Establishing a solid partnership with Uzbekistan is a great move for TAQA. It only heightens the company’s good year. The company finished the first quarter on a good note. It announced a net income of Dhs11.6 billion. That’s TAQA share. It’s a major leap from its previous gains of Dh9.6 billion. The boost is reportedly driven by a one-off gain due to acquiring a 5% shareholding in Adnoc Gas.
The company also revealed its group revenues, which are around Dhs13.1 billion. It’s a good 6% increase from the previous year. The main reason for the increase is the higher pass-through of bulk supply tariffs. It’s also thanks to the transmission used within the Distribution sector. The Adjusted Ebitda of Dhs5.3 billion also helped.
TAQA also shared that its capital expenditure of Dhs1.1 billion is 26% higher than the past year. The company’s generation of free cash flow was around Dhs4.3 billion. It’s a 31% jump in contrast to the last year. Its gross debt settled at Dhs59.8 billion. That’s lower than the Dhs61.7 billion the company struggled with back in 2022.
Thabet had some rousing words to give during the occasion. He acknowledged that TAQA closed the first quarter of 2023 on a positive note. He said the company received quite a boost to its net income. He admitted it was from their new stake in Adnoc Gas. He then added that the company made a lot of progress in delivering its growth strategy. This was alongside their stable financial performance.