Thursday 18 July 2024

Taqa announces financial closing for $620m Abu Dhabi RO plant

ABU DHABI, May 31, 2023

Abu Dhabi National Energy Company (Taqa), has alongside Engie, a global leader in low-carbon energy solutions, and Emirates Water and Electricity Company (Ewec) announced the successful financial closing of the AED2.3 billion ($620 million) low carbon Mirfa 2 Reverse Osmosis (M2 RO) desalination project.
Serving as the third largest RO desalination plant in the UAE, M2 RO will produce 120 million imperial gallons per day (MIGD) of water once fully operational, equating to roughly 550,000 cubic metres per day of potable water.
Expected to be operational in Q4 2025, the plant will be owned by Taqa holding with a 60% share and Engie taking the rest of the 40%. 
Both companies will also take on the operations and maintenance (O&M) of the plant with Engie taking a 60% stake in the O&M company and Taqa taking a 40% stake.  Ewec will procure the water supplied from the plant for 30 years.
The project is primarily funded (78%) through debt financing from both local and international banks, including Abu Dhabi Islamic Bank (ADIB), BNP Paribas Fortis SA/NV, Sumitomo Mitsui Banking Corporation (SMBC), The Norinchukin Bank, BNP Paribas (BNPP) and KfW IPEX-Bank GmbH. This follows Taqa and Engie signing the water purchase agreement with Ewec in February of this year. 
Taqa Executive Director (Generation) Farid Al Awlaqi said: "We are proud to invest in the development, ownership, and operation of this critical water project in Abu Dhabi, which will contribute to the UAE’s decarbonisation efforts as well as Taqa’s own emissions reductions targets."
"In line with our ESG and growth strategies to expand investment in and deployment of high efficiency RO technology to reach two-thirds of our capacity by 2030, Mirfa 2 RO also enables us to accelerate how we decouple power and water operations across our assets to further reduce our carbon impact. Critically, this project also sees Taqa continuing to expand on its O&M capabilities, which is a core part of our strategic growth ambition for 2030," remarked Al Awlaqi.
"In the ‘Year of Sustainability’ and COP28, it is important that we showcase world-class projects like these which exemplify sustainability and also contribute to water security, a global issue and an important agenda item at the conference taking place in the UAE this year," he added.
Ewec CEO Othman Al Ali said: "Mirfa 2 RO is Ewec’s fifth low-carbon intensive RO desalination project to date and will be the third largest RO plant in the UAE once fully operational." 
"Achieving this significant milestone demonstrates Ewec’s leadership in enabling world-class utility-scale projects backed by strong local and international partners that accelerate at pace the UAE’s energy transition, while ensuring a sustainable, affordable, and secure supply of water in line with UAE Water Security Strategy 2036," he stated.
"Creating a pipeline of RO projects that attract investment in the sector is an integral part of Ewec’s strategic initiative to decouple water and power generation, which in turn will enable us to realise the Abu Dhabi Department of Energy’s Clean Energy Strategic Targets 2035 to reduce carbon emissions by up to 75 per cent," observed Al Ali. 
"Through our initiatives, we forecast that over 90 per cent of our water production will be from RO technology by 2030, resulting in an 88 per cent reduction in carbon emissions associated with water production," he added.
Commenting on the deal, Frederic Claux, Managing Director, Flexible Generation and Retail AMEA, Engie, said: "Strong partnerships are key to a successful collaboration, and we are delighted to have partnered with Taqa, once again, on another large-scale desalination asset."
"With more than 30-years’ experience in the Middle East and more than 1,300 MIGD of water desalination capacity, Engie is a long-term partner for the region. The Group's extensive expertise in desalination focuses on developing assets that use Reverse Osmosis membrane technology," he added.-TradeArabia News Service


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