Abu Dhabi National Energy Company (TAQA) Investor Presentation
POWERING A THRIVING FUTURE
Table of contents
- A leading integrated utility, underpinned by strong, recurring cash flows
- Integrating ESG into how we do business
- Maintaining strong financial performance
- Investment thesis
- Appendix
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A leading integrated utility, underpinned by strong, recurring cash flows
POWERING A THRIVING FUTURE
A leading integrated utility at the heart of UAE's energy ambitions
1 | Building a global business with |
solid foundations in the UAE | |
Exclusive | Right of | 23 |
1st refusal | Countries | |
Transmission in | For a minimum of | Global footprint |
Abu Dhabi and | 40% stake in | through power |
Northern Emirates | EWEC generation | generation and |
Distribution in Abu | projects in the | O&G assets. |
UAE | ||
Dhabi | ||
4 | Robust borrowing profile with good |
liquidity levels | |
2 | Operations spread across three | |||
business lines | ||||
H1 24 REVENUE SHARE | ||||
105 | 12% | ~110,000 km | ||
mboe/d | 4% | water & | ||
production | T&D | electricity | ||
Generation | networks | |||
22% | SWS | |||
O&G | 61% | |||
47 GW1 | 1,250 MIGD | |||
gross power | gross water | |||
generation | ~ $4.84bn | desalination | ||
capacity | added to RAB | capacity | ||
via SWS | ||||
5 | Transparent dividend policy |
3 | Strong financial performance & | |
predictable cash flow generation | ||
H1 2024 Revenue | H1 2024 Adj. EBITDA | |
$7.4bn | $3.0bn | |
2% YoY | 4% YoY | |
Adj. EBITDA margin | H1 2024 FCF-to- | |
(Average FY 2021-2023) | EBITDA ratio | |
41% | 39% |
6 | ESG embedded in Group strategy |
with a path to net-zero by 2050 | |
Aa3 | AA |
11% | 2.3x |
Liquidity as a % of | Net debt / LTM |
Defined dividends from
T&D and Generation
(fils/share)
2023P | 2024F | 2025F |
3.25 | 3.50 | 3.75 |
Variable payout
from O&G
business for
2023-2025
Discretionary
percentage of net
profit
H1 2024 Highlights
11% | Commenced | 27% |
Scope 3 | ||
YoY reduction in scope | Female board members |
total assets (H1 2024) | EBITDA (H1 2024) |
Maintaining standalone investment grade rating
- Fixed quarterly dividends
- Variable dividend at year-end
1 & 2 GHG and 19% | disclosure | and 82% independent |
compared to base year | members | |
2019 |
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1. Based on operational and under construction capacities. Includes Masdar generation capacity. Excludes 1GW captive capacity in Oman.
TAQA a key driver of the energy transition in Abu Dhabi System
A deliberate shift towards cleaner energy sources
Planned power generation
structure in Abu Dhabi system
Installed generation capacity by | Energy mix (utilization) across |
type across EWEC network | EWEC network |
Nuclear
-
Base load for Abu
Dhabi's power generation - TAQA provides Transmission & Distribution connectivity
- TAQA does not own the Barakah Nuclear Energy plant
Solar
- Intermittent power supply source
- TAQA has a key stake in all solar plants
Gas
- TAQA has a key stake in all Gas plants
100% | 94% | 100% | ||
90% | 90% | |||
80% | 80% | |||
70% | 68% | 70% | ||
64% | ||||
60% | 60% | |||
50% | 50% | |||
40% | 40% | |||
30% | 19% | 21% | 30% | |
20% | 20% | |||
15% | 13% | |||
10% | 6% | 10% | ||
0% | 0% | 0% | ||
Nuclear | Solar | Gas | ||
2019 | 2023 | 2030F |
100% | |||
62% | |||
51% | |||
32% | 32% | ||
17% | |||
6% | |||
0% | 0% | ||
Nuclear | Solar | Gas | |
2019 | 2023 | 2030F |
Source: EWEC
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Well-articulated strategy to become a low carbon power and water champion focused on optimization and growth
MISSION |
To be a low carbon power and water champion |
VISION
PURPOSE
STRATEGIC PILLARS
To provide the clean power and water that governments, businesses and consumers need for a sustainable and successful life
Powering a thriving future by efficiently providing sustainable and reliable energy and water to unleash the unlimited potential of people and places
Optimization | Growth |
KEY THEMES
Create an integrated and efficient utility company
Partner with the government to establish optimal regulatory system
Enhance security of supply to maintain demand growth in UAE and internationally
Expand product portfolio
Become a sustainable leader and decarbonization partner in the UAE
ENABLERS
Capability Building
Develop people capabilities for
sustainable growth
Financial discipline
Ensure financial stewardship
ESG
Become the UAE's ESG champion
sustainably delivering on our corporate
strategy and objectives
Innovation & Digitization
Enable optimization of existing business and ability to innovate for growth in new business models
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Breakdown of TAQA's power generation capacity
Share of clean energy increasing in portfolio
Gross capacity (GW) | Net capacity (GW) | |||||||||
47.0 | ||||||||||
18.0 | ||||||||||
24.6 | 23.9 | 19.3 | ||||||||
3.9 | 14.5 | 4.9 | ||||||||
14.1 | 1.5 | |||||||||
29.0 | ||||||||||
20.8 | 13.0 | 4.8 | 14.4 | |||||||
9.8 | ||||||||||
-1.6 | 3.4 | |||||||||
1.4 | ||||||||||
TAQA | Masdar Elimination | TAQA + | TAQA | Masdar | TAQA + Masdar | |||||
(joint project) | Masdar | (TAQA Share) |
Current Portfolio (Operating + U/C) | |||||||||
Current Portfolio (Operating + U/C) | |||||||||
Operational | Under construction | Operational | Under construction | ||||||
Technology mix (gross capacity)
Geothermal Other
Coal 4.0% 1.9% 4.9%
Wind
12.9%
Clean | |
energy at | Thermal |
~53% of | |
41.7% | |
portfolio |
Solar
34.5%
Technology mix
(net capacity)
Geothermal | Other | |
Coal | 0.6% | 1.0% |
10.6% | ||
Wind | ||
6.7% |
Clean | |
energy at | |
~32% of | |
Solar | portfolio |
Thermal | |
23.3% | |
57.8% | |
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Refreshed 2030 Power & Water Capacity Growth Targets
Significant upward revision reflecting stronger ambitions
Gross generation | Increasing share of | ||||||||
capacity (GW)* | Renewable Energy | ||||||||
Conventional | |||||||||
Renewable | |||||||||
3X | |||||||||
70% | 30% | 33% | 67% | ||||||
50 | 150 | ||||||||
Previous 2030 target | Refreshed 2030 | Previous 2030 | Refreshed 2030 | ||||||
target | target mix | target mix | |||||||
*7.4GW gross thermal capacity assumed to be | |||||||||
retired by 2030 |
Revised targets follow the successful integration of Masdar's renewable business
- Original targets set as part of 2021 growth strategy
-
TAQA became Masdar's largest shareholder in December
2022 with a 43% stake
Capex/investment plans: AED75 billion to be deployed until 2030 to deliver the announced targets
- Includes power and water capacity expansion as well as previously committed capex of AED40 billion between 2021- 2030 on T&D regulated assets
- Over 80% of the total spend aimed at energy transition activities; AED 50 billion eligible for sustainable finance (as per EU taxonomy)
Water generation | Net generation | |||||||
capacity (MIGD) | capacity (GW)∗ | |||||||
Conventional | Conventional | |||||||
Reverse Osmosis | Renewable | |||||||
1,250 | 1,300 | 50 | ||||||
34% | ||||||||
50% | ||||||||
61% | 19.3 | |||||||
66% | 68% | 50% | ||||||
39% | ||||||||
32% | ||||||||
Existing Capacity 2030 target | Existing Capacity 2030 target | |||||||
(as of H1 '24) | (as of H1 '24) | |||||||
*4.6GW net thermal capacity assumed to be | ||||||||
retired by 2030 |
Breakdown of AED 35bn
Generation CAPEX
4%
55%41%
Investment in Masdar
Water (TAQA) | Power (TAQA) |
Also considering expansion of Transmission & Distribution business outside of the UAE through inorganic and organic opportunities
Establishing growth targets for water generation capacity
- By 2030, two-thirds of water generation capacity will be based on highly efficient reverse osmosis (RO) technology
- Sustaining O&G production capacity across Canada, while decommissioning certain assets in the North Sea
- Commitment to maintain standalone investment grade rating
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Cash flow stability entrenched in TAQA's business model
T&D
GENERATION
Building blocks of Maximum Allowed Revenue (MAR):
RoI on Regulated | Incentive | |
Asset Base (RAB) | BST + Opex | |
structure | ||
+ Depreciation | ||
• Regulatory Control 2 (RC2) increases real WACC from 4.6% to 4.9% for
- Entire domestic and international generation fleet operates under long-term take or pay contracts with highly credible off-takers
- Compensation composed of Capacity Payment and Variable
Payment
- Capacity Payment is dependent on availability (rather than off-take) and includes recovery of capital and return on capital
- In addition to compensation for variable operating costs, Variable Payment includes recovery of fuel
2023-2026
• Annual nominal RoI on RAB: WACC + previous year's CPI
cost on a pass-through basis in select markets.
H1 2024 Revenue breakdown | H1 2024 EBITDA breakdown |
12% | 14% |
22% | 51% |
65% | 35% |
Contracted + regulated: | Contracted + regulated: | |
c.88% of Revenue | Regulated Contracted Other | c.86% of Adj. EBITDA |
- Contracted: Local and international power generation assets
- Regulated: Transmission & Distribution companies (licensed activities), Sustainable Water Solutions
- Other: Oil & Gas, unregulated transmission activities
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