Abu Dhabi National Energy Company has sold a stake in Tesla, a US electric car maker, and bought into a power plant in the semi-autonomous Kurdistan region in northern Iraq.
The government-controlled company, also known as Taqa, has already invested in oil and gas exploration in Kurdistan, and the asset reshuffle aligns its portfolio more closely with its strategy to expand into the Middle East and North Africa (Mena) region.
"Iraq represents a unique growth market with significant need for power and water," said Frank Perez, Taqa's executive head of global power and water. "We have been keen to invest in Iraq's power sector for a while now."
The company is buying a 50 per cent stake in a 1,000 megawatt power plant from Mass Global Investment Company, which owns several power assets in the Kurdish region. The plant near Sulaymaniyah has been in operation since 2009, and has been supplying electricity to the regional government under a 15-year power purchase agreement. A quarter of its capacity is still under construction.
Taqa declined to divulge the value of its investment.
Iraq, including Kurdistan, suffers from a severe shortage of electricity. Power demand is forecast to rise to 16,000MW by 2015, with only just over 5,000MW installed at present. By 2019, demand could rise to 20,000MW.
According to a report by the International Energy Development Organisation, Iraq would need to spend US$12 billion (Dh44.07bn) to meet its current electricity needs, opening the door to further investments by the Abu Dhabi company.
"Taqa is currently in discussions with potential partners in both the north and south of Iraq for greenfield and brownfield power plant developments," said Mr Perez. Taqa plans to invest about $2bn in the energy and utilities sector this year.
Taqa already owns majority shares in Abu Dhabi's power plants, run as public private partnerships (PPPs) with Abu Dhabi Water & Electricity Authority (Adwea). The company also owns a smaller portfolio of power assets in the Mena region, Africa and the United States. It is leading the consortium of private companies poised to win the bid for Dubai's first PPP in the power sector, the Hassyan independent power project. The company also has a stake in WesternZagros, a Canadian oil company that is exploring two blocks in Kurdistan.
Taqa sold more than 7 million shares in Tesla, amounting to about 7 per cent of the US car maker's equity, making a $113m gain over book value on the transaction. Taqa had received the shares from Adwea, which holds a 50 per cent stake in Taqa, in December 2010.
"Tesla was a non-core investment for Taqa that was originally made by Adwea. Taqa hopes to use the proceeds from the sale to fund investments that are more core to our announced strategy of pursuing energy opportunities in the Mena region," said a spokesman.
Taqa, listed on the Abu Dhabi Securities Exchange, reported a 26 per cent profit decline last year after one-off charges on assets in Canada, and higher taxes in the United Kingdom. It has stakes in oil production in the North Sea and in Canada.