ADNOC and TAQA Close Landmark Clean Energy and Decarbonization Transaction
First-of-its-kind sub-sea transmission network in the MENA region, the project rapidly progressed from concept to development phase with construction starting in early 2022
Strategic sustainable power project significantly decarbonizes ADNOC’s offshore production operations, strengthening ADNOC and TAQA’s leading positions in supporting the UAE’s ‘Net Zero by 2050 Strategic Initiative’
Combined investment from Consortium, commercial lenders and Export Credit Agencies yielded more than $3 billion in foreign direct investment, underscoring the UAE’s standing as a trusted, go-to global investment destination
Abu Dhabi, UAE – September 23, 2022: Abu Dhabi National Oil Company (ADNOC) and Abu Dhabi National Energy Company PJSC (TAQA) announced today the successful financial closing of their $3.8 billion strategic project to power and significantly decarbonize ADNOC’s offshore production operations.
Together with a consortium comprised of Korea Electric Power (KEPCO), Kyushu Electric Power Company (Kyuden) and Électricité de France (EDF) (the Consortium), this is a first-of-its-kind high-voltage direct current (HVDC) sub-sea transmission network in the MENA region. The innovative project progressed rapidly from concept to development phase with construction starting in early 2022, underscoring both ADNOC and TAQA’s leading positions to drive climate action and support the ‘UAE Net-Zero by 2050 Strategic Initiative’.
The Consortium will build, own, operate and transfer the state-of-the-art transmission system alongside ADNOC and TAQA, with the full project being returned to ADNOC after 35 years of operation.
Commenting on the successful financial closing of the transaction, His Excellency Dr. Sultan Al Jaber, UAE Minister of Industry and Advanced Technology, Special Envoy for Climate Change and Managing Director and Group CEO of ADNOC, said: “ADNOC has once again demonstrated its ability to successfully structure and close a bold and progressive transaction that will help secure our low-carbon future as we intensify our efforts to decarbonize our operations. This innovative and first-of-its-kind project in the region is driving responsible and sustainable value creation into Abu Dhabi, further cementing the UAE’s standing as a trusted, go-to investment destination of global capital. As the responsible provider of reliable and low-carbon energy, ADNOC will continue to work with our partners to advance practical and commercially viable solutions as the energy transition partner of choice.”
The development is expected to reduce the carbon footprint of ADNOC’s offshore operations by more than 30%, replacing existing offshore gas turbine generators with more sustainable power sources available on the Abu Dhabi onshore power network, operated by TAQA’s wholly owned subsidiary, Abu Dhabi Transmission and Despatch Company (TRANSCO).
His Excellency Mohamed Hassan Alsuwaidi, Chairman of TAQA, said: “TAQA is taking a progressive role in accelerating the UAE’s energy transition by delivering cohesive solutions that enable cleaner sources of power to fuel economic growth. Reaching financial close is an important milestone for this distinctive project, which will see TAQA providing ADNOC offshore facilities with low-carbon energy securely and efficiently through TRANSCO’s power network system. TAQA continues to showcase how its expertise can be utilized to decarbonize industry through strategic partnerships and bringing value to its stakeholders.”
More than 50% of the value of this project will flow back into the UAE’s economy under ADNOC’s hugely successful In-Country Value (ICV) program. This landmark transaction also sets another benchmark for large-scale investment into the UAE and ADNOC from leading global energy companies and reinforces ADNOC’s focus and role as a catalyst for responsible and sustainable investment and value creation for Abu Dhabi and the UAE.
Notes to Editors
- The project was initially announced on December 22, 2021.
- Given higher interest rates at the time of Financial Closing, total project cost is $3.8 billion vs. $3.6 billion as announced on December 22, 2021.
- The KEPCO-led Consortium collectively holds a 40% stake in the project on a build, own, operate and transfer (BOOT) basis, with ADNOC and TAQA each owning a 30% stake.
- The transmission system will have a total installed capacity of 3.2 Gigawatts (GW) and will comprise two independent sub-sea HVDC links and converter stations.
- Commercial operation is expected to commence in 2025.
