TAQA Expands Portfolio with Acquisition of SWS Holding for AED 1.7 Billion
Abu Dhabi National Energy Company (TAQA) has announced its plans to diversify its portfolio through the acquisition of Sustainable Water Solutions Holding Company (SWS Holding) for a total sum of AED 1.7 billion.
In a definitive agreement, TAQA will purchase all outstanding shares of SWS Holding, with 50% of the consideration to be paid upon completion and the remaining 50% to be paid one year after completion. An additional payment linked to net profits generated in 2023 will be made by TAQA in 2024.
The acquisition of SWS Holding represents a significant milestone for TAQA, as it presents a favorable outcome for the company and its shareholders. Not only does it positively impact TAQA’s financial performance, but it also allows efficient use of capital to fuel future growth endeavors.
SWS Holding was established in May 2023 with the aim of providing sustainable water solutions, focusing on resource recovery and water circularity for the benefit of industries and communities. The company took ownership of Abu Dhabi Sustainable Water Solutions Company (ADSWS), previously known as Abu Dhabi Sewerage Services Company (ADSSC), which plays a pivotal role in wastewater collection, treatment, and reuse in the Emirate of Abu Dhabi.
By integrating SWS Holding’s specialized solutions into its comprehensive portfolio, TAQA will become a vertically integrated player with strong capabilities in delivering high-quality water treatment solutions. Both entities share a commitment to operational efficiency and customer service excellence.
The addition of SWS Holding to TAQA’s existing portfolio is highly complementary and will contribute approximately AED 16 billion to TAQA’s regulated asset value, which currently stands at approximately AED 75 billion. This acquisition will enhance TAQA’s cash flow profile and long-term earnings, bolstering its position as a reliable and predictable source of revenue.
Significant synergies are expected to arise from this transaction, creating further value for TAQA and its shareholders. ADSWS will operate under the regulatory controls set by the Abu Dhabi Department of Energy (DoE), similar to those governing TAQA’s existing UAE transmission and distribution businesses.
With a vast network of sewer pipelines extending over 12,000 kilometers and a sewage treatment capacity of approximately 1.3 million cubic meters per day through 37 wholly owned treatment plants, ADSWS, under the BOOT (Build, Own, Operate and Transfer) model, holds a 60% ownership in two companies that operate four sewage treatment plants in Abu Dhabi.
Jasim Husain Thabet, TAQA’s Group Chief Executive Officer and Managing Director, expressed the strategic significance of this transaction, stating, “This acquisition represents 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 principles as our existing power and water transmission and distribution business. The new business will substantially boost our regulated asset base and stable long-term earnings.”
TAQA’s acquisition of SWS Holding marks an important step in the company’s expansion strategy, enabling it to venture into wastewater networks and treatment while benefiting from the established regulatory framework. With this move, TAQA strengthens its position as a leading player in the energy sector and reaffirms its commitment to sustainable growth and operational excellence.
As the transaction progresses, TAQA is expected to unlock further synergies, capitalize on new opportunities, and continue its journey as a prominent contributor to the development of the energy landscape in the United Arab Emirates and beyond.
The acquisition of SWS Holding aligns with TAQA’s long-term vision of expanding its regulated asset base and diversifying its operations. By venturing into wastewater networks and treatment, TAQA can leverage its expertise and experience in the energy sector to create synergies and drive further value for the company and its shareholders.
In conclusion, TAQA’s acquisition of SWS Holding for AED 1.7 billion represents a significant milestone in the company’s pursuit of a diversified and sustainable portfolio. The integration of SWS Holding’s specialized water solutions into TAQA’s operations will strengthen its position as a leading player in the energy sector and further support the UAE’s sustainability goals. With a shared commitment to operational excellence and customer service, TAQA is poised to unlock synergies and create long-term value for its stakeholders.
