Shake up of UAE Water and Power Sector Continues

With TAQA taking on more of the UAE’s water and electricity generation, transmission and distribution assets, what is in store for the country’s utility sector as a whole?

The end of last month saw a landmark announcement from the Abu Dhabi National Energy Company PJSC (TAQA) regarding the transfer of assets from Abu Dhabi Power Corporation’s (ADPower). Once completed, this asset transfer will see TAQA become the majority stakeholder in almost every power and water generation plant currently in use across the entirety of the UAE.

Strengthening the expansion of UAE utilities

This transaction was prompted by the Abu Dhabi Government’s desire to move more quickly in reaching the targets of the UAE’s Energy Strategy 2050 and Water Security Strategy 2036, namely to expand the nation’s utilities capacity while at the same time making generation and distribution cleaner, safer and more sustainable. In a very real sense, the move will make government-owned TAQA the de facto face of utility provision for the UAE, with a powerful hold on shaping its future of water and power generation and distribution. Already, we can see that the direction that the newly dubbed ‘regional utilities champion’ wants to take is one of expansion and public involvement. In a recent interview, Jasim Husain Thabet, Chief Executive Office and Managing Director of ADPower, said that the two companies were creating: “…a dynamic engine of growth that will continue to attract world-class talent, partnership and investment.”

Pooling the resources of both these companies will indeed create a scenario where the newly strengthened TAQA will have the financial pull, coupled with sizeable existing infrastructure, to get new water and power projects tendered and approved more quickly. This appears already to have created a positive impact on both private and public investors, who will no doubt be reassured that they will be well positioned to satisfy the UAE’s rapidly expanding demand for both types of essential utilities.

New power and water projects emerging in the UAE

Abu Dhabi Island Irrigation Project: At a cost of around $12.25 million, the Abu Dhabi City Municipality (ADM)and the Abu Dhabi Department of Municipalities and Transport have teamed up to undertake vital irrigation works across parts of Ab Dhabi Island. Their key efforts include replacing outdated existing works with more advanced irrigation systems, many of them automated, to improve efficiency and reduce water wastage.

Wadi Naqab, Ras Al Khaimah Dam: Replenishing groundwater is another essential task to help reduce water stress levels in the UAE, which has led to the government approving a wide range of new infrastructure projects designed with this end in mind. The $7.5 million Wadi Naqab dam will have a capacity of approximately 1 million cubic metres, and will boost groundwater storage for farms and other agricultural facilities in the area. Improved rainwater storage and the reduction of wasted water are also stated benefits of the project.

Another $35 million has also been earmarked for similar projects related to the construction of new dams and water canals along the east coast of the UAE, as well as in Masfout, Siji and Shawka.

Hatta Project: Due for completion in early 2024, this is a first-of-its-kind project for the region, as the $400 million, 250 MW Hatta Hydroelectric Power Station will be a "pumped hydro" plant, which uses turbines to pump water back uphill, allowing the same water to be used to generate electricity again and again.