Abu Dhabi National Energy Company PJSC (TAQA), a global energy and water company with operations spanning 11 countries across four continents, has signed a definitive agreement to purchase Sustainable Water Solutions Holding Company (SWS Holding).
In May 2023, the formation of SWS Holding was publicly disclosed, marking its commitment to providing sustainable water solutions by emphasising resource recovery and water circularity for the betterment of industries and communities. Following its establishment, SWS Holding assumed control of Abu Dhabi Sustainable Water Solutions Company (ADSWS), previously recognised as Abu Dhabi Sewerage Services Company (ADSSC). ADSWS has been playing a pivotal role in the Emirate of Abu Dhabi, overseeing the collection, treatment, and reuse of wastewater.
By incorporating the specialised solutions offered by SWS Holding, TAQA will enhance its extensive portfolio and establish itself as a vertically integrated entity. This strategic move will grant TAQA robust capabilities in providing top-notch water treatment solutions.
SWS Holding serves as an excellent complement to TAQA’s current portfolio and is projected to contribute around AED16bn ($4.36bn) to TAQA’s regulated asset value, which is currently estimated at approximately AED75bn. This addition will further strengthen TAQA’s cash flow profile, providing increased predictability and security, as well as bolster its long-term earnings potential. The transaction is anticipated to yield significant synergies, resulting in value creation for both TAQA and its shareholders. Moreover, ADSWS will operate under the same regulatory controls established by the Abu Dhabi Department of Energy (DoE), which govern TAQA’s existing transmission and distribution businesses in the UAE, ensuring operational consistency and regulatory oversight.
ADSWS boasts an extensive network of sewer pipelines that span over 12,000km in length. It operates 37 treatment plants, all wholly owned, with a collective sewage treatment capacity of around 1.3 million cubic metres per day. Additionally, through a 60% ownership stake in two companies, ADSWS holds interests in four sewage treatment plants located in Abu Dhabi. These plants operate under the ‘Build, Own, Operate and Transfer’ (BOOT) model, allowing ADSWS to effectively manage and maintain them.
According to the agreement, TAQA will acquire the entire share capital of SWS Holding for a total of AED1.7bn. The payment structure entails 50% of the consideration being paid upon completion of the transaction, while the remaining 50% will be paid one year later. In addition, TAQA will make an additional payment in 2024, which will be linked to the net profits generated during 2023.
TAQA’s Group CEO and managing director Jasim Husain Thabet said: “The strategic acquisition of SWS Holding is an important step in TAQA’s accelerated delivery of its growth agenda, backed by our shareholders. Two years ago, we set out our growth ambitions in a 2030 strategy, and since then we have been delivering against our promises. This transaction is a logical extension of our regulated asset base into wastewater networks and treatment, which in Abu Dhabi is subject to the same structure of regulation and the same principles as our existing power and water transmission and distribution business. The new business will provide a substantial boost to our regulated asset base and associated stable long-term earnings.”
“The efficient management of water will play a key role in enabling the UAE to reduce greenhouse gas emissions. By bringing the management of recycled water together with TAQA’s water desalination activity and our recycled water network, we can do even more to support the net zero target by 2050.”
SWS Holding CEO and managing director Ahmed Al Shamsi said: “SWS Holding has embarked on its journey with a firm commitment to providing sustainable water solutions that will not only benefit our customers and local communities, but also help protect our planet and its ecosystems. We look forward to continuing on this path together with TAQA.”
The completion of the transaction is anticipated to take place within this year, contingent upon the successful fulfilment of all necessary transaction prerequisites. This includes obtaining the required regulatory approvals and relevant third-party consents. TAQA, being predominantly owned by Abu Dhabi Power Corporation (ADPower) with a stake of 90.03%, along with a 7.30% ownership by Multiply Group, remains committed to progressing the transaction in a timely manner.
