Masdar seeks new projects amid push to boost capacity by 10 gigawatts this year

The entry of Taqa and Adnoc as shareholders has made a significant change to the clean energy company’s growth strategy, executive says

The Masdar stall at Abu Dhabi Sustainability Week 2023. Victor Besa / The National

Abu Dhabi clean energy company Masdar aims to add up to 10 gigawatts of new capacity this year and is considering acquisitions and new projects in different markets as part of its growth strategy, a senior executive has said.

The additional capacity “will come from across all countries”, Fawaz Al Muharrami, executive director of clean energy at Masdar, told The National in an interview on the sidelines of Abu Dhabi Sustainability Week.

“We have different models of investment. We have greenfield development which we are going to continue to develop. We also have acquisitions that are an important part of our business and we will continue to acquire [projects].”

However, he did not specify the total investment planned and said it would depend “on shareholding and financing of the projects”.

“We are looking towards normal project finance instruments through different lending facilities available in the market and, in case there is no commercial lending, we tap into developmental financial institutions,” Mr Al Muharrami said.

“On top of that, we are going to, hopefully, embark on having a green bond possibility, which would allow us to raise additional money.”

Masdar is currently active in more than 40 countries and has invested or committed to invest in projects worth more than $30 billion.

The company has an ambitious target to grow its capacity to at least 100 gigawatts of renewable energy capacity globally by 2030.

“We are already in most of the markets internationally. The exception is China and certain markets in South America, but we are looking into those markets opportunistically and if there is a good opportunity for us to invest, we are definitely going to look for that.”

Global renewable power capacity growth is on track to nearly double in the next five years, overtaking coal as the largest source of electricity generation, the International Energy Agency said last month.

Renewable power capacity is expected to grow by 2,400 gigawatts by 2027, equivalent to the current power capacity of China, the world’s second-largest economy, the IEA said in its Renewable 2022 report.

China, which has the world’s largest installed solar capacity, is expected to account for about half of new global renewable power capacity additions over the next five years.

“There are also some markets which we have entered [such as India and others] but we have not been lucky … but now, definitely, we will be more aggressive,” Mr Al Muharrami said.

India, the world’s second-most populous country and Asia’s third-largest economy, is investing heavily in non-fossil resources as it aims to generate 50 per cent of its total energy requirements — 500 gigawatts — by the end of this decade.

It is providing tax concessions and incentives for the adoption of renewable energy in industries and other sectors.

Last month, the Abu Dhabi National Energy Company, better known as Taqa, Mubadala Investment Company and Adnoc completed a deal to become shareholders in Masdar.

The transaction is expected to help Masdar grow rapidly on a global scale under an expanded mandate that covers renewable power, green hydrogen and other clean energy technology.

The entry of Taqa and Adnoc as shareholders has made a significant change, Mr Al Muharrami said.

“First of all, the growth strategy has been increased four to five times. Today, we are talking about 100 gigawatts within the coming years.”

The new partnership will “provide access to those suppliers, contractors, which they have built” and the relationship of the companies with different governments “gives additional entry into those markets”, he said.

Masdar will also look for “new opportunities to jointly invest in the US on different projects” and help to support decarbonisation efforts in the world’s largest economy, he said.

The UAE and US are allocating $20 billion to fund 15 new gigawatts of clean and renewable energy projects in the US before 2035, in the first wave of investment under their $100 billion clean energy partnership.

The investments will be led by Masdar and a consortium of US private investors, it was announced this week.

The company will also boost its presence in Saudi Arabia through new renewable energy projects, Mr Al Muharrami said.

Last year, Masdar opened a new office in Saudi capital Riyadh to manage its projects as the Arab world’s largest economy aims to generate half of its power needs from clean energy sources by the end of the decade and plans to invest more than $180 billion to cut its carbon emissions to net zero by 2060.

Saudi Arabia “remains an important geography for us”, he said.

“We already have two assets, one in operation [the 400-megawatt utility-scale Dumat Al Jandal wind plant] and one in construction [the 300MW South Jeddah solar project]. We are going to continue our engagement through the coming tender opportunities and help Saudi Arabia’s 2030 energy mix vision.”