Abu Dhabi National Energy Company (TAQA) has made an official announcement regarding its definitive agreement to purchase Sustainable Water Solutions Holding Company (SWS Holding). The agreement entails TAQA acquiring all outstanding shares of SWS Holding for AED1.7 billion. The payment terms involve 50% of the consideration being made upon completion, while the remaining 50% will be paid one year after completion. Additionally, TAQA will make an extra payment in 2024, which will be tied to the net profits generated during 2023.
This strategic transaction is seen as a highly favorable outcome for TAQA and its shareholders due to its positive impact on TAQA’s financial performance and the efficient utilization of shareholders’ capital for future growth. SWS Holding was established with the aim of delivering sustainable water solutions, focusing on resource recovery and water circularity to benefit industries and communities. As part of this initiative, SWS Holding took ownership of Abu Dhabi Sustainable Water Solutions Company (ADSWS), formerly known as Abu Dhabi Sewerage Services Company (ADSSC), which is responsible for wastewater collection, treatment, and reuse in the Emirate of Abu Dhabi.
By integrating SWS Holding’s specialized solutions into TAQA’s extensive portfolio, the company will become a vertically integrated player with strong capabilities in providing high-quality water treatment solutions. Both TAQA and SWS Holding share a commitment to operational efficiency and customer service excellence. The addition of SWS Holding will increase TAQA’s regulated asset value by approximately AED16 billion, enhancing the company’s cash flow profile and long-term earnings.
The transaction is expected to create significant synergies, generating 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 transmission and distribution businesses in the UAE.
ADSWS manages a vast network of sewer pipelines spanning over 12,000 km and possesses a sewage treatment capacity of approximately 1.3 million cubic meters per day through its 37 wholly owned treatment plants. Furthermore, the company has a 60% ownership stake in two entities that own four sewage treatment plants in Abu Dhabi under the ‘Build, Own, Operate and Transfer’ (BOOT) model.
Jasim Husain Thabet, TAQA’s Group Chief Executive Officer and Managing Director, expressed that this transaction aligns with TAQA’s regulated asset base expansion into wastewater networks and treatment. He emphasized that in Abu Dhabi, wastewater management follows the same regulatory structure and principles as TAQA’s existing power and water transmission and distribution business. Thabet further stated that the acquisition would significantly increase TAQA’s regulated asset base and provide stable long-term earnings. Moreover, he highlighted the crucial role of efficient water management in reducing greenhouse gas emissions, emphasizing TAQA’s commitment to supporting the UAE’s net zero target by 2050.
Ahmed Al Shamsi, SWS Holding’s Chief Executive Officer and Managing Director, expressed enthusiasm about becoming part of TAQA, a national champion with ambitious sustainability goals. Al Shamsi believes that the integration of their strengths will foster collaboration and lead to improved services in sustainable water management. SWS Holding is dedicated to providing sustainable water solutions that benefit customers, local communities, and the environment.
The completion of the transaction is expected to take place this year, pending successful fulfillment of necessary transaction requirements, regulatory approvals, and other relevant third-party authorizations. Abu Dhabi Power Corporation (ADPower) owns 90.03% of TAQA, while Multiply Group owns 7.30%.