Stock TAQA
Taqa has been through multiple transactions in the recent past, including becoming a shareholder in Masdar. Image Credit: Shutterstock

Dubai: Abu Dhabi’s utility sector has seen a major consolidation with Taqa acquiring SWS Holding, which was created in May 2023 in the emirate to deliver sustainable water solutions for industries and communities.

SWS Holding thereafter took ownership of Abu Dhabi Sustainable Water Solutions Company (ADSWS), formerly known as Abu Dhabi Sewerage Services Company. The latter is the main entity behind all wastewater collection, treatment, and reuse in the emirate.

Taqa will acquire all outstanding shares of SWS Holding for Dh1.7 billion, with 50 per cent of the consideration to be paid upon completion and the remaining one year after completion. Taqa will make an additional payment in 2024 linked to net profits generated during 2023.

"This strategic transaction, at such attractive terms, represents an extremely positive outcome for Taqa and its shareholders, given the impact it will create on Taqa’s financial performance whilst allowing efficient use of shareholders capital to fund future growth," the company said in a statement.

SWS Holding is 'highly complementary' to Taqa’s existing portfolio and will add around Dh16 billion to its existing regulated asset value of about Dh75 billion.

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"Two years ago, we set out our growth ambitions in a 2030 strategy, and since then we have been delivering against our promises," said Jasim Husain Thabet, Taqa’s Group CEO and Managing Director. "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.”

In May, Taqa entered a $2.4 billion deal with ADNOC for the delivery of sustainable water solutions to the latter's onshore operations.

The transaction is to complete this year. Taqa is owned 90.03 per cent by Abu Dhabi Power Corporation (ADPower) and 7.30 per cent by Multiply Group.

ADSWS's considerable network
The Abu Dhabi Sustainable Water Solutions Company has a network of sewer pipelines extending to over 12,000 km, a sewage treatment capacity of about 1.3 million cubic meters per day from its 37 wholly-owned treatment
plants, and through 60% ownership in two companies owning four sewage treatment plants in Abu Dhabi under a ‘Build, Own, Operate and Transfer’ (BOOT) model.