ADQ and Taqa sign energy deal with Kazakhstan's wealth fund

ADQ and its portfolio companies will invest up to $6bn in power projects in the central Asian country

A group of wind generators in the steppes of Kazakhstan. Abu Dhabi's ADQ and Taqa have agreed with Kazakhstan's Samruk-Kazyna to explore the development of three greenfield power projects in the country. Photo: Alamy

Abu Dhabi’s holding company ADQ and energy company Taqa signed a long-term agreement with Samruk-Kazyna, the sovereign wealth fund of Kazakhstan, that will lead to investment of up to $6 billion in energy projects in the central Asian country.

The entities will create a holding company that will oversee and manage any acquired assets, the companies said in a statement released by Abu Dhabi Media Office on Wednesday evening.

ADQ, Taqa and Samruk-Kazyna will explore three greenfield power projects in Kazakhstan, including a two-gigawatt solar photovoltaic (PV) power plant, a 2 gigawatt wind power plant and a 1 gigawatt combine-cycle gas-fired power plant.

ADQ and Taqa would jointly hold a 51 per cent stake in each project with Samruk-Kazyna keeping the remaining interest. Meanwhile, Taqa would also be involved in the operations and maintenance of all three projects.

“As one of the region’s largest investment companies and with Abu Dhabi’s largest portfolio of energy and utilities investments, we actively seek new investment opportunities where we can add value while contributing positively to the energy ecosystem," said Mohamed Alsuwaidi, chief executive of ADQ and chairman of Taqa Group.

The deal follows the announcement of Abu Dhabi National Oil Company and Taqa becoming joint shareholders along with Mubadala Investment Company in Masdar, The move will help increase the clean energy company's renewable power capacity to more than 50 gigawatts by 2030, the companies said on Wedensday.

Taqa is taking a 43 per cent stake in Masdar renewables assets businesses, along with Mubadala and Adnoc taking 33 and 24 per cent, respectively.

The Kazakhstan’s renewables assets will likely be owned by the newly formed renewables platform under the umbrella of Masdar, while the combined cycle plant would likely be held directly by Abu Dhabi-listed Taqa, EFG Hermes said in a research note to investors.

Both announcements are "positive developments that could boost future capacity growth," EFG Hermes said. "We think these announcements aim at expediting the UAE’s renewables targets, as well as those growth targets previously communicated by Taqa."

The deal with Samruk-Kazyna comes as bilateral ties between the UAE and Kazakhstan grow. In October, the governments of the two countries signed a joint declaration, establishing a long-term strategic partnership aimed at developing projects in priority industries.

The recent agreement builds on existing energy deals between the two countries. In February, Masdar and Samruk-Kazyna signed an agreement to explore renewable energy opportunities in the country.

Under the preliminary agreement, the two companies said they will study the potential to collaborate on renewable energy projects and the establishment of a joint venture, Masdar said at the time.

ADQ and Taqa will also use their expertise to modernise the current grid in Kazakhstan.

"Besides developing the greenfield power projects the joint company will also work on modernisation of the traditional electric power sector by shifting to gas and green energy sources," said Almassadam Satkaliyev, chief executive of Samruk-Kazyna.

Updated: December 2nd 2021, 8:45 AM