Abu Dhabi National Oil Co. is considering an investment in renewable energy developer Masdar, in what could be one of the green power industry’s largest deals this year, people familiar with the matter said.
Adnoc is in preliminary talks to acquire a significant minority stake in Masdar, according to the people, who asked not to be identified because the information is private. It’s interested in the company’s portfolio of solar parks, wind farms, waste-to-energy projects and electric vehicle charging networks, the people said.
A transaction would help Adnoc, one of the world’s biggest energy explorers, diversify its portfolio into more carbon-neutral assets. Any deal would add to a consolidation drive in oil-rich Abu Dhabi, which has already seen mergers among some of its largest sovereign wealth funds and financial institutions.
State-owned utility Abu Dhabi National Energy Co., known as Taqa, had also previously studied a potential investment in Masdar, the people said.
Masdar, owned by Abu Dhabi sovereign fund Mubadala Investment Co., was started under the leadership of Sultan Al Jaber, who’s now chief executive officer of Adnoc and climate envoy for the United Arab Emirates. The company has invested more than $7 billion since its founding in 2006 to become one of the largest clean energy developers in the world, with assets across the Middle East, Europe, Africa and the US.
No final decisions have been made, and there’s no certainty Adnoc’s discussions will lead to a deal, the people said. Representatives for Adnoc, Taqa and Mubadala declined to comment. A spokesperson for Masdar didn’t immediately respond to a request for comment.
The UAE is considering setting a goal to reach net-zero carbon emissions by the middle of the century, part of a global push to limit global temperatures from rising. Acquiring a Masdar stake would allow Adnoc, whose portfolio is mainly hydrocarbons, to funnel its fossil fuel profits into alternative energy sources.
Taqa, which is controlled by Abu Dhabi sovereign wealth fund ADQ, also has plans to cut its exposure to oil and natural gas assets in a bid to attract more international investors. The company wants to boost the portion of its power produced from solar and wind to 30 percent over the next decade.
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