DUBAI: Abu Dhabi’s TAQA plans to turn GS Inima into its main vehicle to pursue an international expansion strategy in the water sector, its CEO told Reuters on Monday, a day after the state-owned utility acquired the Spanish company for $1.2 billion.
“It will be our engine for growth internationally when it comes to desal (desalination) and wastewater and municipal water,” TAQA’s chief executive Jasim Husain Thabet said in an interview.
The Emirati company announced on Sunday it had reached an agreement to acquire 100% of Madrid-based GS Inima from South Korea’s GS Engineering & Construction.
The deal, which is expected to close next year, is the largest M&A transaction in water outside of the United Arab Emirates (UAE) for TAQA, Thabet said. “(The deal) sits really in the sweet spot of our growth strategy and transformation”, he said, as it will allow the Abu Dhabi company to enter eight new markets, including Brazil and Mexico.
GS Inima operates around 50 active projects, including around 30 long-term public-private partnerships that provide steady fees under inflation-adjustment mechanisms.
TAQA, which said it aims to spend around $20 billion between 2023 and 2030 on organic and inorganic growth, has in recent months committed to investing billions of dollars in various large-scale water projects in countries such as Morocco and Uzbekistan.
The acquisition will add 171 million imperial gallons per day (MIGD) of desalination capacity to its 1,250 MIGD portfolio.
It will also support TAQA’s target to source two-thirds of its water desalination capacity from reverse osmosis technology by 2030 from around 40% at present, and will boost wastewater capacity with an additional 2.6 million cubic meters per day.
Thabet said that the transaction will be financed using TAQA’s funds.
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