Dewa to spend $11bn to expand its renewable energy capacity over next five years

The Dubai utility confirmed that $4.35bn will be earmarked to boost its water and electricity network

Saeed Al Tayer says Dewa has 'strong cash flows' and 'no issues for the next five years'. Antonie Robertson / The National

The Dubai Electricity and Water Authority will be investing Dh40 billion ($11bn) in capital expenditure over the next five years to power its renewable energy portfolio, it said on Wednesday, confirming media reports.

The utility, which started trading on the Dubai Financial Market on April 12, was addressing a report published by Bloomberg on Tuesday quoting its managing director and chief executive Saeed Al Tayer. The news was also reported by Al Bayan newspaper.

Dewa will earmark Dh16bn ($4.35bn) to boost its water and electricity network, Dh12bn on existing independent power production projects and Dh3bn on district cooling services, it said in a statement to the bourse on Wednesday.

The remaining amount will complement various existing projects, especially smart systems and infrastructure, it said.

"We are writing to confirm the news printed on 26 April 2022 that Dewa shall invest Dh40 billion in capital expenditure over the next five years with a focus on increasing renewable energy generation capacity," the statement said.

Dewa's listing earlier this month was the largest in the Middle East and Europe since Saudi Aramco’s debut in 2019. Its shares surged about 23 per cent on its first day of trading on the DFM, after it raised Dh22.41bn from its initial public offering amid strong investor demand.

Its shares were down around 1 per cent at midday trading on Wednesday. It has a market value of about $39bn, which is the largest on the exchange.

Dewa expects to record an annual profit of Dh7.3bn in 2022, Mr Al Tayer told CNBC Arabia on Friday. It is set to announce its first-quarter results in May and has recorded a “strong performance” so far this year, he said.

The utility has "strong cash flows", and won't need to take on debt and seek loans. It also has "no issues for the next five years", Mr Al Tayer said.

Asked if Dewa's IPO success will encourage a listing of its affiliated units, Mr Al Tayer said “secondary offerings of the companies affiliated with us will be announced if they are approved”.

Mr Al Tayer said last week that the IPO of Dubai-based district cooling provider Emirates Central Cooling Systems Corporation — better known as Empower — will happen “soon” but not in the current quarter.

“We will announce the date at the right time,” he said at the time, without elaborating.

Plans to list the company, which is a joint venture between Dewa and Dubai's Tecom Investments Group, were first announced in December last year.

Dewa also recently announced that its EV Green Charger initiative has provided more than 8,800 megawatt-hours to owners of electric vehicles in Dubai, enabling them to travel more than 58 million kilometres since 2015, while cutting refuelling costs by about three quarters.