Debt Investor Presentation - POWERING A THRIVING FUTURE Abu Dhabi National Energy Company (TAQA)
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Debt Investor Presentation Abu Dhabi National Energy Company (TAQA) May 2021 POWERING A THRIVING FUTURE
Disclaimer
These materials have been prepared by Abu Dhabi National Energy Company (“TAQA” or the “Company”). The information contained in this presentation may not have
been reviewed or reported on by the Company’s auditors. The Company relies on information obtained from sources believed to be reliable but does not guarantee its
accuracy or completeness.
These materials have been prepared for information purposes only and do not form part of any prospectus, offering memorandum or offering circular or an offer to sell
any securities and are not intended to provide the basis for any credit or any third party evaluation of any securities or any offering of them and should not be considered
as a recommendation that any investor should subscribe for or purchase any securities. The information contained herein supersedes any previous such information
delivered to you and will be superseded by any such information subsequently delivered. The information contained herein is subject to change without notice and past
performance is not indicative of future results. The Company is under no obligation to update or keep current the information contained herein. No person shall have any
right of action (except in case of fraud) against the Company or any other person in relation to the accuracy or completeness of the information contained herein.
This presentation may contain, or may be deemed to contain, "forward-looking statements" regarding future events or the future financial performance of the Company.
These forward-looking statements include all matters that are not historical facts. The inclusion of such forward-looking information shall not be regarded as a
representation by the Company or any other person that the objectives or plans of the Company will be achieved. The Company undertakes no obligation to publicly
update or publicly revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Please note that rounding differences may appear throughout the presentation.
2
Table of contents
1 Executive summary 4
2 TAQA / ADPower transaction recap 10
3 TAQA portfolio overview 17
4 Key investment highlights 22
5 Corporate governance 30
6 Q1 2021 results 34
7 FY 2020 results 38
7 Q&A 41
8 Appendices 42
3
Executive summary
Key objectives achieved by TAQA – ADPower transaction
Strengthened capital structure, secure cash flow profile and strong growth prospects
Formation of one of the largest listed integrated utilities in the region holding the rights in
A
perpetuity for the regulated power and water network concessions in Abu Dhabi
Creation of a national
power & energy champion to
lead sector transformation Enjoys exclusivity rights to participate in all future power and water generation
B
projects tendered in Abu Dhabi over the next ten years with a minimum 40% stake
Highly predictable and secure cash flow profile underpinned by a transparent regulatory
Enhanced capital structure with A framework and long term offtake contracts leading to more than 90% of EBITDA being
contracted or regulated
a strong balance sheet and
secure cash flow profile
Robust capital structure and immediate deleveraging of TAQA, with further
B
performance uplift potential from integration
Strong and stable company providing virtually all the critical power and water
A infrastructure for the Abu Dhabi economy and the only vehicle available to invest in
Essential infrastructure this sector
company for Abu Dhabi with
strong government support Positioned to capture the infrastructure growth expected in Abu Dhabi and selectively
B
seeking value-added growth outside the Emirate
5Favourable ratings outcome post-transaction
Improved business profile acknowledged through extraordinary upgrade of TAQA’s standalone ratings
Standalone ratings Final ratings Standalone Ratings Final Ratings
baa1 Aa3 / Stable bbb+ AA- / Stable
6-notch upgrade 3-notch upgrade to AD 7-notch upgrade 2-notch upgrade to AD
ratings less 1 notch ratings less 1 notch
Standalone ratings Final ratings Standalone Ratings Final Ratings
b1 A3 / Stable ‘b’ category A / Stable
Obtained rare rating upgrade Almost unprecedented Narrowed rating differential to Abu Dhabi
Highlights during COVID-19 3-notch upgrade (by Moody’s) sovereign to only 1 notch
● Transaction significantly enhances asset portfolio by the addition of the ● Asset transfers to TAQA improves its position in electricity generation
transmission and distribution assets to its generation assets and and water desalination, and secures a leadership position in the water
creating a leading integrated utility in the Emirate of Abu Dhabi and electricity sector in Abu Dhabi
● Higher ownership and strategic nature of TAQA operations strengthens ● TAQA to enjoy a pronounced importance to Abu Dhabi's electricity and
importance to Abu Dhabi water markets, UAE Energy Strategy 2050, and its role in diversifying
● The transfer of assets significantly improves TAQA's financial profile the Emirates' generation towards renewables
through improved leverage metrics post transaction ● Maintains moderate level of leverage
[Moody’s] consider the asset transfer as a form of financial support from the Very Strong assessment of the support track record and expectations factor
government to TAQA because it will significantly improve its capitalisation is driven by consistent, timely and large-scale tangible support provided by
…. Given the highly strategic nature of these operations in an arid and harsh Abu Dhabi to TAQA …. upgrade is supported by the strengthening of the
desert climate, [Moody’s] expect the government to continue to support links under Fitch Government-Related Entities Rating criteria between
TAQA's operations. TAQA and its majority indirect shareholder Abu Dhabi (AA/Stable).
Moody’s 5 July 2020 Credit Opinion
Fitch 3 July 2020 Rating Action Commentary
6Q1 2021 results – summary
Stable utilities businesses boosted by oil price recovery
Strong operational performance amidst continuing COVID-19 circumstances Group financial highlights (US$ million)
Revenues
● High technical availability levels maintained for power and water businesses
Q1 2020PF 2,719
● Oil and gas production stable versus prior-year period
Q1 2021 2,812
Financial performance boosted by a recovery of commodity prices EBITDA
● Revenue of US$ 2.8 billion (+3% Q1 y/y) Q1 2020PF 1,138 40% margin
● EBITDA of US$ 1.3 billion (+12% Q1 y/y) reflecting higher revenues, lower operating Q1 2021 1,278 47%
expenses and higher associate income
Net income (TAQA-share)
Net income (TAQA-share) of US$ 391 million for Q1 2021
Q1 2020PF -149
● Driven by higher EBITDA, lower DD&A, no impairments and lower finance costs
Q1 2021 391
● Increase of c.US$ 540 million versus prior year period due to c.US$ 400 million post-tax
CAPEX
impairment charge taken in Q1 2020 within Oil & Gas
Q1 2020PF 294
Capex of US$ 347 million in Q1 2021 (+18% Q1 y/y)
Q1 2021 347
● General resumption and acceleration of spend compared to last year, which saw deferral
and postponement at the onset of COVID-19 Gross debt
Free cash flows1 were strong at US$ 934 million for the quarter 3m 2020PF 20,696
3m 2021 20,178
7
1. Operational cash flows before finance costs less investing cash flowsTAQA’s 2030 growth strategy
2030 TAQA targets1
TAQA has introduced a new strategy
with ESG at its heart
AED 40 billion (US$ 11 billion) RAV2 additions
through substantial UAE-based infrastructure and networks growth projects
Strategy focused on TAQA becoming a low carbon power and
water champion for the UAE and beyond 30GWac UAE generation capacity
up from 18GWac as at YE 2020
Decoupling power and water generation, deploying highly efficient
reverse osmosis technology for desalination5
add up to 15GWac int’l generation capacity
TAQA also aims to reduce its exposure to hydrocarbons to current 4.9GWac capacity as at YE 2020
>30% renewable power and 2/3rds RO3
Robust growth agenda based around renewables and up from 5% and 14% shares of power & water generation at YE 2020
expansion of UAE networks
… to support UAE National Energy Strategy 2050
Further pursue optimization and digitalisation to
Demand Side Supply Side
improve efficiencies and margins
40% energy demand reduction 50% clean energy in capacity mix
vs. BaU4 by 2050 by 2050
Enhance capabilities in key areas, with a particular focus on
operations & maintenance and on project development
In the Transmission & Distribution segment, intend to improve 25-50% 40%
customer service and develop ADES
increase in clean energy increase in energy efficiency
Implement growth strategy whilst maintaining
prudent financial policies
70% AED 700 billion
Commitment to maintain strong investment grade emissions reduction from
credit ratings on a standalone basis (US$ 191 billion) savings target
power generation
8
Source: Company Information, UAE Energy Strategy 2050 document (link: https://u.ae/en/about-the-uae/strategies-initiatives-and-awards/federal-governments strategies-and-plans/uae-energy-strategy-2050).
Note: 1. As per Company strategy update announced 24 March 2021; 2. Regulated asset value; 3. Reverse osmosis; 4. Business as Usual; 5. 200 MIGD RO plant already under construction (Taweelah RO)TAQA US$1.5 Billion 7 and 30-year dual-tranche bond offering
Priced inside secondaries to produce TAQA’s lowest ever coupon
First refinancing exercise post ADPower transaction and resulting credit rating upgrades Summary new issue terms
Successfully priced US$ 1.5 billion dual-tranche offering, via intraday execution Abu Dhabi National Energy
Issuer
Company PJSC (TAQA)
● Issuance preceded by roadshow of investor calls across Asia, Europe, GCC & USA
Format Reg S / 144A
as well as launch of buyback exercise of corporate bonds maturing in 2021 and 2023
Ranking Senior unsecured
● Total orderbooks peaked at c.US$6.5 billion resulting in ~4x oversubscription
● 7-year tranche priced at a re-offer yield of 2.031% (coupon of 2.000%) and 30 year Tenor 7 years 30 years
Formosa at 3.400%
Maturity Date April 29, 2028 April 29, 2051
● Represents issuance at spreads and yields inside TAQA’s secondary yield curve
Re-offer yield 2.031% 3.400%
The refinancing of upcoming 2021 maturities will have the effect of lowering our cost of debt
and extending maturities Coupon 2.000% 3.400%
● Effective interest rate is lowered by 33bps (to 3.692% from 4.017% on US$ 9.4 billion1 Size US$750 million US$750 million
of gross corporate debt) giving estimated annual savings of over US$ 30 million London Stock LSE and Taipei
Listing
Exchange (LSE) Exchange
● Weighted average years to maturity of corporate debt will be extended to almost 9
years (up from 6 years1 prior to the transaction) Issue rating Aa3 / AA- (Moody’s / Fitch)
A strong vote of confidence in TAQA’s new financial profile and business model, as well as future strategy and financial policies
9
1. As at March quarter-end and assuming all else equalTAQA / ADPower transaction recap
ADPower and TAQA are writing history
Creating a regional water and electricity champion that will transform the sector
22 GWac of electrical 913 MIGD of water over 100,000 km of 11 countries with 1 million
generation capacity desalination capacity water and electricity operations end-user connections
networks in UAE
US$ 50bn1 US$ 11.3bn2 Strong credit
asset size of revenues & ability to
the combined company pay dividends
11
1. As at end-Q1 2021; 2. Last-twelve-months including proforma 2020 consolidated figuresMerger timeline and key milestones
Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021
3 August
Initial Strategy 5 May
13 December
3 February Direction published Q1 2021
Shareholders
Transaction announcement results
approve new
(ADPower offer to TAQA) dividend policy and
1 July
Transaction close and new interim cash dividend 24 March
management is paid (for first time Strategy update
29 April since 2013) announcement
TAQA Annual Moody’s standalone / final
General Assembly credit ratings upgrade
approval (to baa1 / Aa3 stable) 10 November 18 March
Q3 2020 proforma and Final dividends and
3 July statutory financials, Board expansion at
6 April
Fitch standalone / final credit first for combined entity Annual General Assembly
TAQA Board of
Directors approval ratings upgrade
(to bbb+ / AA- stable) Increase FOLs to 49% 14 February
from 0% FY 2020 proforma financials
5 July 19 April
and final dividend proposed
TAQA commitment to Propose dividend policy Bond tender offer
(in line with dividend policy)
maintaining solid investment for shareholder and new issue
grade standalone credit ratings approval launch
12Key objectives achieved by TAQA – ADPower transaction
Strengthened capital structure, secure cash flow profile and strong growth prospects
Formation of one of the largest listed integrated utilities in the region holding the rights in
A
perpetuity for the regulated power and water network concessions in Abu Dhabi
Creation of a national
power & energy champion to
lead sector transformation Enjoys exclusivity rights to participate in all future power and water generation
B
projects tendered in Abu Dhabi over the next ten years with a minimum 40% stake
Highly predictable and secure cash flow profile underpinned by a transparent regulatory
Enhanced capital structure with A framework and long term offtake contracts leading to more than 90% of EBITDA being
contracted or regulated
a strong balance sheet and
secure cash flow profile
Robust capital structure and immediate deleveraging of TAQA, with further
B
performance uplift potential from integration
Strong and stable company providing virtually all the critical power and water
A infrastructure for the Abu Dhabi economy and the only vehicle available to invest in
Essential infrastructure this sector
company for Abu Dhabi with
strong government support Positioned to capture the infrastructure growth expected in Abu Dhabi and selectively
B
seeking value-added growth outside the Emirate
13Corporate structure pre and post transaction with ADPower
TAQA and ADPower structure pre-transaction TAQA structure post-transaction
Government of Abu Dhabi ADX Float ADX Float Government of Abu Dhabi
100%
ADQ ADQ
100% 25.9% 100%
ADPower ADPower
1.4% 98.6%
100% 74.1%
TAQA TAQA
TransCo (TRANSCO) Other ADPower Assets
54% stake in TAQA UAE IWPPs Pre-transaction TAQA assets ADPower NewCo
DisCos (ADDC + AADC)
EWEC
International IPPs 54% stake in TAQA UAE IWPPs TransCo (TRANSCO)
60%1 stake in ADPower UAE IWPPs
Oil and Gas International IPPs DisCos (ADDC + AADC)
6% stake in TAQA UAE IWPPs
Other associates and JVs Oil and Gas 60%1 stake in ADPower UAE IWPPs
EWEC
Land Lease Agreement Other associates and JVs 6% stake in TAQA UAE IWPPs
Other ADPower Assets
TAQA post-transaction
Terminated
Transaction (as part of the transaction)
Perimeter
14
1. Except AMPC, which is fully owned.Favourable ratings outcome post-transaction
Improved business profile acknowledged through extraordinary upgrade of TAQA’s standalone ratings
Standalone ratings Final ratings Standalone Ratings Final Ratings
baa1 Aa3 / Stable bbb+ AA- / Stable
6-notch upgrade 3-notch upgrade to AD 7-notch upgrade 2-notch upgrade to AD
ratings less 1 notch ratings less 1 notch
Standalone ratings Final ratings Standalone Ratings Final Ratings
b1 A3 / Stable ‘b’ category A / Stable
Obtained rare rating upgrade Almost unprecedented Narrowed rating differential to Abu Dhabi
Highlights during COVID-19 3-notch upgrade (by Moody’s) sovereign to only 1 notch
● Transaction significantly enhances asset portfolio by the addition of the ● Asset transfers to TAQA improves its position in electricity generation
transmission and distribution assets to its generation assets and and water desalination, and secures a leadership position in the water
creating a leading integrated utility in the Emirate of Abu Dhabi and electricity sector in Abu Dhabi
● Higher ownership and strategic nature of TAQA operations strengthens ● TAQA to enjoy a pronounced importance to Abu Dhabi's electricity and
importance to Abu Dhabi water markets, UAE Energy Strategy 2050, and its role in diversifying
● The transfer of assets significantly improves TAQA's financial profile the Emirates' generation towards renewables
through improved leverage metrics post transaction ● Maintains moderate level of leverage
[Moody’s] consider the asset transfer as a form of financial support from the Very Strong assessment of the support track record and expectations factor
government to TAQA because it will significantly improve its capitalisation is driven by consistent, timely and large-scale tangible support provided by
…. Given the highly strategic nature of these operations in an arid and harsh Abu Dhabi to TAQA …. upgrade is supported by the strengthening of the
desert climate, [Moody’s] expect the government to continue to support links under Fitch Government-Related Entities Rating criteria between
TAQA's operations. TAQA and its majority indirect shareholder Abu Dhabi (AA/Stable).
Moody’s 5 July 2020 Credit Opinion
Fitch 3 July 2020 Rating Action Commentary
15TAQA shares and bonds have reacted positively
Share price has rallied and daily value traded significantly increased Bond yields improved and spreads to Mubadala and Abu Dhabi tightened
● TAQA’s share price has tripled (up ~180%) since deal announcement ● TAQA bonds now pay only 0.31% more and yield approx. the same as the Abu Dhabi
● ADX market index up 28% over the same period sovereign for 10 and 30-year borrowing (vs. 0.75% and 0.60% prior to transaction)
● Average daily value traded up from US$ 0-1mn to US$ 2-3mn ● TAQA bonds are currently trading flat to Mubadala’s curve, which is rated at the
sovereign level but trades at a spread to it
● TAQA 10-year bonds currently yield 2.343% and 30-year bonds 3.267%
1 July 10 Nov 13 Dec
Closing 9m 2020 results Dividend policy approved;
3 Feb 29 Apr
2 Announcement AGM approval and new proposed interim dividends distributed 20 COVID-19 market dislocation
Daily traded value (USDmn)
Price (AED)
dividend policy 24 Mar 3 Feb 29 Apr 10 Nov
2030 strategy Announcement AGM approval 9m 2020 proforma
1.8 announcement 18 results and new
3 Nov 1.8% 5%
Yield
proposed dividend
Yield spread
Notice of BoD 14 Feb 5 May 1 July policy
1.6 FOL discussion FY 2020 Q1 2021 16 Closing
results results 19 Apr
Bond tender offer and
1.4 14 new issue launch
1.4% 4%
TAQA AED 1.35
1.2 12 3 2020)
(+182% vs Feb
1.0% 3%
1 10 Yield 2.343% (RHS)
(-76bps vs Feb 3 2020)
0.8 8
0.6% 2%
0.6 6 Spread to AD
ADSMI 31bps (-47bps)
(+28%)
0.4 4
0.2% 1%
Spread to Mubadala
0.2 2 2bps (-43bps)
Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21
0 0 -0.2% 0%
Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21
TAQA 2030 vs. Mubadala 2028 (& 2030*) TAQA 2030 vs. Abu Dhabi 2029 (& 2030**)
Traded Value (USDmn; RHS) TAQA (AED) ADX General (rebased) TAQA 4.875% 2030 yield (RHS)
16
Source: Bloomberg, as of 31 May 2021 Source: Bloomberg as of 31 May 2021
* Starting 18 May 2020 as new on-the-run benchmark; ** starting 14 April 2020TAQA portfolio overview
Iraq
TAQA at a glance (1) Atrush block in Kurdistan Region of Iraq
TAQA-operated;
10,283 boepd (9%)*
100% crude
Our global footprint UK / the Netherlands
Oil and gas assets (off and onshore)
2P reserves: 27mn boe (9%)*
TAQA-operated and non-operated
34,755 boepd (29%)*
85% crude / 14% gas / 1% NGL
2P reserves: 29mn boe (9%)*
United Arab Emirates
Two gas storage facilities
12 gas-fired and renewable power and water plants
GSB (60% TAQA), PGI (40%);
Non-operated;
Gas storage capacity:
40-80% TAQA; 0-20% Other GRE; 40% Int’l Partners**
4.7 bcm (53.2 TWh)
17,668 MW (82%)* / 913 MIGD (100%)
Canada 13 years weighted average P(W)PA residual life
Oil and gas assets
TAQA-operated and non-operated India
72,928 boepd (62%)* Neyveli lignite-fired power plant
16% crude / 70% gas / 14% NGL TAQA-operated; 100% TAQA
2P reserves: 263mn boe (82%)* Morocco 250 MW (1%)*
Jorf Lasfar coal-fired power plant 12 years
TAQA-operated;
86% (units 1-4), 91% (units 5-6)
2,056 MW (9%)*
23 years
Power Oman
Sohar Aluminium smelter
Power and Water Non-operated; 40% TAQA
United States Ghana 1,000 MW *** / 375k tons
Country Red Oak gas-fired power plant (New Jersey) Takoradi gas-fired power plant aluminium per year
Plant name Non-operated merchant asset; TAQA-operated; 90% TAQA Captive
Operatorship; TAQA ownership 85% TAQA 330 MW (2%)*
Power / water (installed capacity^) 832 MW (4%)* 20 years
P(W)PA residual life (as at 31/12/2020) Saudi Arabia
2 years (tolling agreement)
Jubail Energy gas-fired power and steam plant
Non-operated; 25% TAQA
Lakefield wind farm (Minnesota)
United Arab Emirates 250 MW (1%)* / 510 tons per hour of steam
Non-operated; 50% TAQA
Transmission and Distribution 206 MW (1%)*
Transmission and distribution 4 years
Operated; 100% TAQA
11 years
~100,000 km power and water networks
Oil and Gas Note: 49% associate investment in Massar Solutions not shown
^ Installed gross power and water capacity at PCOD
Country * Percentage of global TAQA capacity / production / 2P reserves of
Asset description 21,592 MW, 913 MIGD / 118.0mboped / 320mmboe
Operatorship ** Int’l partners include: Engie, Marubeni, JGC, JinkoSolar, Sumitomo, ACWA
FY 2020 average production Power, BTU, EDF, JERA, Kepco, Powertek, Kyuden, Sembcorp, Osaka, Total
Hydrocarbon production mix (% crude / gas / NGL) *** Not included in total capacity given TAQA stake in whole smelter
2P reserves (as at 31/12/2020) (powered by a captive power plant)
18TAQA at a glance (2) Fujeirah F1
Sweihan PV 60% TAQA
60% TAQA
Our Abu Dhabi and UAE home markets 1,177 MW (DC) Ras al Khaimah
882 MW / 131 MIGD
Gas / MSF, RO; 15 years
Solar PV; 24 years
Umm Al Quwain
Fujeirah F2
Ajman 60% TAQA
Shuweihat S1 Umm al Naar
2,114 MW / 132 MIGD
60% TAQA 60% TAQA Sharjah
Gas / MED, RO; 10 years
1,615 MW / 101 MIGD 2,290 MW / 96 MIGD
Transmission (Transco) Dubai
Gas / MSF; 4 years Gas / MSF; 7 years
100% TAQA Fujeirah F3
~14k km power and water networks (under construction)
Shuweihat S2 40% TAQA, 20% Mubadala
Distribution (ADDC & AADC) 60% TAQA 2,400 MW
100% TAQA 1,627 MW / 101 MIGD Gas; 25 years (from PCOD,
~89k km power and water networks Gas / MSF; 16 years expected 2023)
~1 million end-user connections Al Mirfa (MIPCO)
Shuweihat S3
60% TAQA
60% TAQA
1,665 MW / 53 MIGD Abu Dhabi Interconnection
1,647 MW
Gas / MSF, RO; 22 years to Oman (GCCIA)
Interconnection Gas; 19 years
to Saudi Arabia (GCCIA) Al Ain
Taweelah A1
60% TAQA
Power (thermal) 1,671 MW / 84 MIGD
Gas / MSF, MED; 8 years
Power (renewable)
Taweelah A2
Power and Water (cogeneration) 60% TAQA
760 MW / 53 MIGD
Water Gas / MSF; 1 year
Plant name Taweelah B
TAQA and GRE ownership 60% TAQA
Power / water (installed capacity^) 2,220 MW / 162 MIGD
Fuel / desalination technologies (as applicable) Gas / MSF; 8 years
(P)(W)PA residual life (as at 31/12/2020)
Taweelah RO
Development projects (under construction)
20% TAQA, 40% Mubadala
68 MW / 200 MIGD
Al Dhafra PV Solar PV / RO; 30 years (from PCOD,
Transmission and Distribution (under construction) expected 2022)
Asset name 40% TAQA, 20% Masdar
TAQA ownership 2,000 MWdc (1,500 MWac)
Transmission or distribution networks Solar PV; 30 years (from PCOD
Other details expected 2022)
19Current growth projects
Significant generation capacity and network additions to meet demand and energy transition
Generation Distribution
Group
Taweelah RO Al Dhafra PV Fujairah F3 Recycled Water Distribution
Country
● World’s largest sea-water ● World’s largest solar ● UAE’s largest gas-fired (CCGT) ● Two projects to distribute recycled ● 3.9 GWac / 200 MIGD
reverse osmosis plant (44% larger photovoltaic plant independent power project (IPP) water beyond municipal landscaping additional generation
than current largest plant) to include commercial and capacity
● 2 GWdc (1.5GWac) power ● 2.4 GW power generation capacity agricultural operations
● 200 MIGD water desalination generation capacity ● Substantially de-
Overview capacity ● One of the most efficient in the ● Capacity to distribute 85 MIGD of risked financial
● One of the most cost-competitive region recycled water profile(1):
● 68 MW onsite (captive) solar PV tariffs at US$ 1.32 cents/kWh
power generation capacity (levelized cost of electricity ● 150 km of pipelines in two phases − Long-term PWPAs
basis) with EWEC (Abu
44.8
Dhabi govt. owned)
● US$ 870 million ● US$ 1.0 billion ● US$ 1.1 billion ● US$ 245 million − Contractual prot-
Project cost ection for cost risks
● 40% lower than average fleet cost
(e.g. fuel, O&M)
Expected ● 2022 with 30-year WPA ● 2022 with 30-year PPA ● 2023 with 25-year PPA ● Q3 2021 (30 MIGD pipeline) − LTSAs with OEMs
for turbines
PCOD ● Q4 2021 (55 MIGD pipeline)
● 20% TAQA, 40% Mubadala, ● 40% TAQA, 20% Masdar, ● 40% TAQA, 20% Mubadala, ● Not applicable
40% ACWA Power 20% EDF, 20% JinkoSolar 40% Marubeni
Sponsors
UAE generation projects demonstrate new 40% exclusivity rights, which continue out to next ten years
20
1. For generation projects, as for existing UAE generation fleetGeneration energy and technology mix
Clear and rapid transition to clean technologies
Old TAQA (pre-transaction) New TAQA (current, Q1 2021) New TAQA (proforma end-2023)
Thermal (natural gas) Thermal (natural gas) Thermal (natural gas)
Thermal (coal) 1% renewables Thermal (coal) 5% renewables Thermal (coal) 11% renewables
Renewable (wind) Renewable (solar PV) 1% Renewable (solar PV) 1%
Power generation
1% Renewable (wind) 4% Renewable (wind) 10%
14% 11%
9%
17.1 21.3 24.5
GWac1 GWac1 GWac1
85% 84% 80%
Thermal (natural gas Thermal (natural gas Thermal (natural gas
cogeneration)
11% reverse cogeneration)
14% reverse cogeneration)
29% reverse
osmosis osmosis osmosis
Water desalination
Electric (reverse 11% Electric (reverse 14% Electric (reverse
osmosis) osmosis) osmosis) 29%
909 913 1,113
MIGD MIGD MIGD
71%
89% 86%
Targeting >30% share of renewables and 2/3rds share of reverse osmosis within total Group generation capacities by 20302
21
1. Alternating current capacity and excluding TAQA’s stake in Sohar Aluminium (Oman), a smelter with a 1GW captive power generation plant; 2. As per updated strategy announced 24 March 2021Key investment highlights
Key investment highlights
1 National champion and one of the largest listed integrated utility companies in EMEA
Leader in the
Vertically integrated across the value chain, benefiting from exclusivity rights over strategic utilities sector
2
power and water infrastructure assets
3 Highly predictable and secure cash flow profile
Secure cash flow
powerhouse
4 Long-standing, transparent and internationally-aligned regulatory framework
5 Strong ties to Abu Dhabi Inc. and fully aligned with Abu Dhabi Economic Vision 2030
Stable platform
Positioned to capture infrastructure growth in Abu Dhabi and selectively seeking value-added with clear growth
6 channels
growth outside the Emirate
231 One of the largest listed integrated utilities in EMEA
Top EMEA Utilities - Market Capitalization (US$ bn)1 Top EMEA Utilities - RAB (US$ bn)1,3,4 Highlights
100 67
✓ Top listed integrated utility
79 57
player in the region5
65 50
✓ Top 3 listed entity on ADX
42 40 and in the UAE5
41 37
✓ Top 5 listed non-financial
35 34 institution in the GCC5
28 25
✓ Top 5 utility player in EMEA
26 22 by market capitalization and
top 10 by RAB
25 19
0 50 100 150
22 GWac 913 MIGD US$ 51 billion3 1 million
electricity generation capacity of water desalination capacity in total assets end-user connections in the UAE
24
Source: Company information. Notes: 1. FX rates as of 14 March 2021; EUR/USD of 1.1940, DKK/USD of 0.1606 and GBP/USD of 1.3897; 2. Factset as of 14 March 2021; 3. As per latest disclosure; 4. Excludes Saudi Electricity who have not yet
disclosed regulatory asset base following recent regulatory reforms; 5. Based on market capitalization.2 Vertically integrated across the utilities value chain
TAQA segmental overview and financial highlights
UAE Value Chain International Assets
Group1
Generation1 Transmission Distribution Generation2 Oil & Gas
fully contracted regulated networks largely contracted
Countries
5%
6%
FY 2020 41%
proforma
EBITDA 1.8 2.1 0.3 0.2 US$ 4.4
(US$ bn) 49%
and % of total
● 17.4 GWac / 913 MIGD ● 10.4k km of electricity ● ~1 million end-user ● 4.9 GW2, 3 gross power ● 118.0k boepd FY 2020A ● 22.3 GWac /
gross power / water transmission networks, connections generation capacity average net production 913 MIGD
capacity3 3.6k km of water pipelines ● 74.6k km of electricity ● 320mn boe 2020A capacity3
Operational
● 3.9 GWac / 200 MIGD of networks and 14.1k km 2P reserves ● ~80k / 20k km
highlights new power / water capacity of water pipelines ● 4.7 BCM gas storage electricity /
under development capacity4 water networks
● 11 I(W)PPs in UAE ● Regulated by Abu Dhabi ● Sole distributors of water ● Includes power generation ● International oil and gas ● Fully integrated
● Exclusive rights to min. Department of Energy and electricity to end users facilities in 5 countries assets in the UK, utility with
40% stake in Abu Dhabi ● Sole transmission in Abu Dhabi emirate ● TAQA Morocco is listed on Netherlands, Canada6 upstream and
Segment power and water generation company in Abu Dhabi (ADDC, AADC) the Casablanca stock and Iraq midstream oil
Overview projects over next 10 years ● Also supplies Northern exchange and provides and gas assets
● Supplies >95%5 of Abu Emirates and connects to >40% of Morocco’s base- and operations
Dhabi’s power & water GCCIA grid (KSA, Oman) load power needs in 11 countries.
Source: TAQA FY 2020 proforma financials (disclosed in MD&A); figures may not show corporate segment or eliminations; percentages may not add to 100% due to rounding.
1. EBITDA figures and operational highlights exclude Taweelah RO, Fujairah F3 and Al Dhafra Solar growth projects; 2. EBITDA figures exclude JV investment (Lakefield) and operational highlights include TAQA’s minority stake in Sohar
Aluminium (Oman), a smelter with a 1GW captive power generation plant; 3. Installed gross alternating current capacities at PCOD. 4. Capacities at Bergermeer Gas Station & Peak Gas Installation in The Netherlands; 5. Excluding captive
power generation in UAE, e.g. ADNOC, EGA; 6. In early 2020, TAQA North exited all its oil and gas activities in the United States (a non-core region with mature assets and production of less than 1,000 boepd). 253 Highly predictable and secure cash flow profile
Over 90% of revenues and EBITDA derived from regulated and contracted businesses
P Pro forma LTM Revenue Pro forma LTM EBITDA
Regulated and long-term contracted earnings Regulated Contracted Other Regulated Contracted Other
represent over 90% of revenues and EBITDA
11% 7%
P 29%
US$
11.3bn1
US$
4.5bn1
47%
Single regulatory framework in place for 3 60% 46%
regulated networks (Transco, ADDC and AADC) in
Abu Dhabi ensures predictable cash flows
• Contracted: Local and international power generation assets
P •
•
Regulated: Transmission and Distribution companies
Other: Pre-dominantly Oil and Gas3
12 years2 weighted residual life of P(W)PAs
excluding projects under development. The latter
will have 25 or 30-year purchase agreements once Long-term predictability and visibility of cash flow profile underpinned by 90% or
completed in the next 2 years more of revenues and EBITDA derived from regulated and contracted assets
26
1. TAQA last twelve months (LTM) pro-forma consolidated financials; 2. Weighted by gross installed power capacity and excluding Red Oak tolling agreement - merchant asset; 3. Includes Red Oak tolling agreement, Massar and Sohar Aluminium,
among other minority investments.4 Long-standing, transparent & internationally-aligned regulation
Business Model for Transmission and Distribution segment in Abu Dhabi Key Elements of the T&D Regulation
Remuneration of transmission and distribution companies
Abu Dhabi government RAB-based framework with transparent and
Local Regulator
objective & guidelines • Abu Dhabi Distribution Company (ADDC) publicly available regulatory guidelines
T&D suppliers
regulated by • Al Ain Distribution Company (AADC)
the DoE • Abu Dhabi Transmission and Despatch Company (Transco)
Abu Dhabi Framework adjusted every 4 years, following a
Revenue Flow in the Regulated Networks System
Department of Energy stable methodology and internationally-aligned
TUoS
Discos
regulatory WACC
Transco
• Regulation of energy • Regulates and (ADDC and AADC)
sector is fully aligned supervises the energy
with Government of Abu sector in Abu Dhabi Gov’t
Dhabi’s objectives of subsidy Abu Dhabi networks’ regulation in place since
Tariff
guaranteeing supply to • Regulations and codes are 1999, with no major changes to regulatory
customers in line with available publicly on DoE
website Abu Dhabi principles since then
global levels of service Customers
Government
Evolution of Regulatory Periods Since 1999 Revenue Building Blocks for Regulated Companies MAR dominated by fixed component
at 85% of total revenues
Other Pass-Through
PC1, 2, 3, 4 & 5 RC1 RC2
Performance Incentives
Depreciation Variable Terms
Previous regulatory periods Current period Next period MAR collected from end users and government
Opex subsidy acting as a revenue balancer
1999-2017 2018 – 2022 2023 – 2026
Fixed Terms
Return on Capital
• Stable regulatory framework with same principles being applied since inception (WACC x RAV)
of regulation in 1999 Maximum Allowed
Required Revenue TAQA’s constant dialogue with the regulator and
• Regulatory periods usually last for 4 years Revenue (MAR)
relationship with the DoE ensure a continuing
• Current RC1 period to be extended for an extra year to ensure continuity during NPV framework to determine optimal regulatory environment
the Covid situation Fixed & Variable terms
27
Sources: Abu Dhabi Department of Energy Regulation & Supervision Bureau (now superseded by the Abu Dhabi Department of Energy)5 Strong ties to Abu Dhabi Inc. & fully aligned with Abu Dhabi
Economic Vision 2030
A key strategic asset for Abu Dhabi … …given TAQA’s essential contribution to Abu Dhabi’s economy
98.6% indirect ownership by the Government of Abu Dhabi (GoAD)
Board members include executives of ADQ and other GoAD entities
Strategically important, providing over 95%1 of Abu Dhabi’s power and water needs
TAQA was specifically established TAQA is the largest holding in the
through an Emiri decree ADQ Portfolio
Long track record of government support including equity contributions and grants
…with full alignment with Abu Dhabi Economic Vision 2030
Economic Development Environmental Development Human Capital Development Social Development
UAE ● Increased contribution of non- ● Effective management of labor
● Emiratisation, especially in highly
Goals hydrocarbon GDP ● Environmental sustainability resources
skilled niches
● Future energy & water security ● Improvements in education
● Key enabler in diversification of the ● Accredited HS&E standards with ● Improving living standards in local
economy improving KPIs ● One of the highest Emiratization communities through social
TAQA’s ● Key contributor to Abu Dhabi's ● 6% renewable contribution in rate among UAE-listed companies investments with a meaningful
Contribution economy, representing ~5% of TAQA’s proforma energy mix3 impact
2019 GDP2
28
Source: TAQA corporate disclosures, Government of Abu Dhabi bond prospectus & supplement
Notes: 1. Excluding capitve power generation, e.g. EGA, ADNOC; 2. Calculated using TAQA’s 2019A PF revenues in the UAE of AED 43.9bn and Abu Dhabi’s GDP at constant prices in 2019 of AED 804bn; 3. As at YE20206 Ability to access high-value growth opportunities…
Selective approach to growth in
Growth across the value chain in the UAE
international markets
Exclusivity rights in all future
Optimally placed to Key role in delivering Enjoys a monopoly on
power and water projects TAQA will selectively seek value-
capture potential growth targets of the UAE T&D networks in Abu
opportunities in the UAE Energy Strategy 2050
tendered in Abu Dhabi over the added growth outside of UAE
Dhabi
next ten years with a 40% stake
✓
• Invest in new power & water capacity in Abu Dhabi to match demand growth and Focus on markets where we have a
transition to renewables strong competitive advantage, e.g.
Generation existing presence or strong G2G
• Investment in RO1 and solar, fulfilling UAE strategy of raising renewable share of relationships
power generation to 50% by 2050
✓
• Major projects to expand and interconnect the power, water and recycled water Focus on contracted or regulated power
infrastructure of Abu Dhabi and water generation opportunities with
Transmission attractive risk-adjusted returns
and distribution • Growth of power and water grid to accommodate new / growing demand
• Potential for further UAE networks consolidation with similar regulation
✓
Enter projects with substantial size
Distribution and • Entry to and development of new customer services, e.g. EV charging and smart that fit TAQA’s core competencies
Customer Services meters
29
1. Reverse osmosisCorporate governance
Board of Directors
Nine members with positions on boards and committees of various Abu Dhabi GREs
H.E. Mohamed Hassan Al Suwaidi Saeed Mubarak Al Hajeri H.E. Saif Mohamed Al Hajeri Jasim Husain Thabet Khalifa Sultan Al Suwaidi
Chairman Vice Chairman Board Member Managing Director and Group CEO Board Member
● Board member since 2019, elected Chairman in ● Board Member since 2011, elected Chairman in ● Elected to the Board in 2020 ● Board member since 2019 ● Elected to the Board in 2020
2020 2014 and Vice Chairman in 2020 ● Chairman of ADPower ● Over two decades of experience in the energy ● Chief Investment Officer for ADQ
● CEO of ADQ, the parent company of ADPower ● Executive Director at ADIA ● Previously Chairman of Abu Dhabi’s Dept. of and utilities sector ● Chairman of SENAAT, Agthia and NPCC, and
● Chairman of EWEC and Vice Chairman of ● Vice-Chairman and a member of the investment Economic Development and member of the ● Board member of Etihad Aviation Group, Vice Chairman of Abu Dhabi Ports and board
ADPower; Also a Board Member of ADNOC committee and technology committee of Islamic Executive Council of Abu Dhabi ADPower & ADPorts member of EWEC
Distribution, Board Member and member of the Arab Insurance Company (“Salama”) and
● Served as CEO of Tawazun Economic Council ● Served as the CEO of Tabreed as well as CEO ● Previously Executive Director of Refining &
audit committee of ENEC, Board Member and previously a Member of the Executive Advisory
and Tawazun Holding and MD of ADPower Petchems at Mubadala and Acting CEO of Abu
member of the human capital committee of EGA Board of MSCI Barra. Also a Board Member of
● BBA and Bachelor's degree in Economics from ● Bachelor’s degree in Mechanical Engineering Dhabi National Chemical Company
and a Board Member and member of the INSEAD
investment committee of Abu Dhabi Retirement ● BBA from Lewis & Clark college, Executive Lewis & Clark College from St. Martin’s University, Washington, USA ● Bachelor’s degree in Business from California
Pensions & Benefits Fund Education from Harvard Business School, CFA State University and EMBA from Zayed University
● Previously led Metals & Mining at Mubadala charter holder
● Bachelor's in Accounting from UAE University Other TAQA roles: NRC Other TAQA roles: NRC Chair Other TAQA roles: AC, NRC, SIC Chair
Salem Sultan Al Dhaheri Khaled Abdulla Al Mass Mansour Mohamed Almulla Hamad Abdulla Al Hammadi
Board Member Board Member Board Member Board Member
● Board Member since 2011 ● Board Member since 2014 ● Chief Investment Officer for ADQ ● Investment Director at ADQ
● Deputy Director at ADlA ● Board Member of Abu Dhabi Health Services ● Supervisory Board Member and a member of the ● Previously at Mubadala including secondment to
● Also a Board Member of Al Etihad Credit Bureau Company (SEHA) and an executive board portfolio & projects committee and presidential & the Carlyle Group in Washington DC, US
(where he also serves on the audit committee) member of iMass lnvestments and iTech nomination committee of OMV ● Member of TAQA Morocco’s Supervisory Board,
Engineering Consultancy Aktiengesellschaft; Board Member and Audit Board member of EWEC and Nabil Foods
● Member on the audit committees of ADNOC,
● Bachelor’s degree in Management from Committee Chair at Abu Dhabi Ports; Board and
EIA, Etisalat, General Pension and Social ● Previously a Board member of SMN Power
Marylhurst University, United States Audit Committee member of Etihad Aviation
Security Authority and the Abu Dhabi Retirement (publicly listed power generation company in
Group
Pensions & Benefit Fund and the SPC/ADNOC Oman)
● Previously held senior management positions at
● Certified Public Accountant ● Higher Diploma in Business and Management
Mubadala, including CFO, Petroleum &
(Accounting) from the Higher Colleges of
Petrochemicals and CFO of Mubadala Petroleum
Other TAQA roles: AC Technology, UAE
● BBA Information Systems from Portland State
Other TAQA roles: AC Chair, SIC Other TAQA roles: SIC
University, Oregon, USA
31
Note: AC = Audit Committee; NRC = Nomination and Remuneration Committee; SIC = Strategy & Investment CommitteeExecutive management
Jasim Husain Thabet Steve Ridlington Omar Abdulla Alhashmi Farid Al Awlaqi Franco Polo
Group CEO and MD CFO Transmission & Distribution Generation Oil and Gas
• CEO and MD since July 2020 • CFO since July 2020 • Executive Director Transmission & Distribution • Executive Director Generation since July • Executive Director Oil and Gas since July
• Board member since 2019 • Previously Chief Investment Officer at since July 2020 2020 2020
• Over 18 years experience in the energy and ADPower. • Previously Executive Director Asset • Previously served as Senior Vice President • More than 30 years of experience in
utilities sector • Held leadership positions at BP, TNK-BP, Management at ADPower in the Energy platform at Mubadala. international exploration and production
• Board member of EWEC and Tabreed, serving as CFO at the latter • Held leadership positions in Etihad Airways • Sloan Master’s degree from London • Previously served as Executive Vice
• Served as CEO and MD of ADPower, CEO of • Master’s degree in Economics from Oxford and Mubadala Investment Company. Business School, UK and a master’s degree President of Upstream of the Asian Pacific
Tabreed and VP of Industry at Mubadala University, UK, bachelor’s degree in • MBA from London Business School, UK and in Petroleum Engineering from Imperial region at Eni, an integrated energy company.
• Bachelor’s degree in Mechanical Engineering Economics & Mathematics from University of Master’s degree in Mechanical Engineering College London, UK • Master’s and bachelor’s degrees in Geology
from St. Martin’s University, Washington, USA Sussex, UK from George Washington University, USA. from University of Bologna, Italy.
Stephen Wackerle Mohammad Adnan Sharafi Noel Aoun Gareth Wynn
Chief Risk and Internal Audit Officer Chief Legal Officer and Board Secretary Strategy and M&A (acting) Chief Communications Officer
• Chief Risk and Internal Audit Officer since July • Chief Legal Officer since July 2020 • Head of Strategy and M&A (acting) since July • Appointed January 2021, overseeing
2020 • Served as General Counsel at ADPower 2020 and previously Group Strategy and external and internal communication,
• Held similar leadership roles with ADPower • Holds a post-graduate diploma in legal Business Development Director since 2018 government advocacy and CSR activities
and BP practice (LPC) from The College of Law and • Held leadership positions in Schneider Electric across the Group.
• Bachelor’s and post-graduate degree in a Bachelor of Laws from University of and Booz&Co • Held senior communications positions at Oil
Accounting from the University of Cape Town, Westminster, UK. • MBA from INSEAD and a master’s in & Gas UK and management positions at
South Africa Electrical and Computer Engineering from EDF Energy and FTI Consulting.
Ecole Supérieure des Ingénieurs de Beirut • Bachelor of Science in Microbiology and
Microbial Technology from University of
Warwick, UK.
32Corporate governance
Guiding Principles TAQA Current Board & Management Committees
• TAQA’s corporate governance policy is based on the principles of transparency, fair disclosure,
financial supervision and accountability; follows the rules laid out for all UAE-listed entities1
Audit Committee
• These principles are essential to establish a successful governance framework and laying down the
foundations and methodologies to achieve TAQA’s goals in line with the interests of its clients,
shareholders and employees Board Nomination & Remunerations Committee
Relevant Policies and Priorities
Strategy & Investment Committee
Code of Business Ethics Delegation of Authority HSSE Management
Business Continuity Information Security Whistleblowing
Executive Management Committee
Responsibilities of the Board of Directors
• Setting the Group’s strategy and business principles Executive Investment Committee
• Supervising the Group’s executive management Management
• Supervising the adequacy of the human resources required to implement the Group’s strategies Risk & HSE Committee
• Supervising the adequacy and effectiveness of internal controls and corporate governance
• Approving investments, business plans, budgets and financial statements of the Group
• Ensuring that shareholders receive accurate, timely and appropriate information
Dealing in Company Shares
Internal Audit Department Compliance Department
• No Board Members or their direct family members traded in TAQA’s shares during 2020
Enterprise Risk Management
External Auditors HSSE Department
Department
• Deloitte became the independent auditor for TAQA from 1 July 2020, replacing Ernst & Young
Middle East; this appointment was confirmed during the Group’s AGM on 29 April 2020 Business Continuity Department
33
1. Based on SCA's Resolution No.3 of 2020 concerning the Standards of Institutional Discipline and Governance of Public Shareholding Companies.Q1 2021 results
Q1 2021 results – summary
Stable utilities businesses boosted by oil price recovery
Strong operational performance amidst continuing COVID-19 circumstances Group financial highlights (US$ million)
Revenues
● High technical availability levels maintained for power and water businesses
Q1 2020PF 2,719
● Oil and gas production stable versus prior-year period
Q1 2021 2,812
Financial performance boosted by a recovery of commodity prices EBITDA
● Revenue of US$ 2.8 billion (+3% Q1 y/y) Q1 2020PF 1,138 40% margin
● EBITDA of US$ 1.3 billion (+12% Q1 y/y) reflecting higher revenues, lower operating Q1 2021 1,278 47%
expenses and higher associate income
Net income (TAQA-share)
Net income (TAQA-share) of US$ 391 million for Q1 2021
Q1 2020PF -149
● Driven by higher EBITDA, lower DD&A, no impairments and lower finance costs
Q1 2021 391
● Increase of c.US$ 540 million versus prior year period due to c.US$ 400 million post-tax
CAPEX
impairment charge taken in Q1 2020 within Oil & Gas
Q1 2020PF 294
Capex of US$ 347 million in Q1 2021 (+18% Q1 y/y)
Q1 2021 347
● General resumption and acceleration of spend compared to last year, which saw deferral
and postponement at the onset of COVID-19 Gross debt
Free cash flows1 were strong at US$ 934 million for the quarter 3m 2020PF 20,696
3m 2021 20,178
35
1. Operational cash flows before finance costs less investing cash flowsLiquidity and debt profile
Strong liquidity levels and stable debt levels
Key credit metrics
Robust liquidity position
● Total liquidity of US$ 4.7 billion consisting of: Dec-2020 Mar-2021
− Cash and cash equivalents of US$ 2.2 billion Net debt-to-capital ratio1 49% 48%
− Undrawn credit facilities of US$ 2.5 billion EBITDA (LTM) / net finance costs (LTM)2 4.9x 5.3x
Debt levels lower on RCF repayments and project finance amortization
Net debt / EBITDA (LTM) 4.2x 4.0x
● Gross debt1 of US$ 20.2 billion (-3% vs. YE 2020) with RCF repayment
of US$ 250 million during Q1 2021 and ongoing project debt
amortization
Corporate debt maturity profile3 (US$ million as at quarter end)
3,033 Drawn RCF Bonds (corporate) Project / subsidiary debt
2,331 2,227
1,603 1,781
1,350 1,651
1,212
755 718 674
481 480 502 471 500
325 120 286 129
117
21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40-43 ' 2049
36
1. Net capital defined as net debt plus equity (including minorities and accumulated changes in the fair value of derivatives); 2. net finance costs include ARO accretion expensesDelivering on our quarterly dividend policy
Board approves first interim cash dividend for 2021
Board has approved first interim cash dividend for financial year 2021 of US$ 168 million (AED 0.55 fils/share), in line with shareholder-
approved dividend policy
● Last day to participate: Sunday, 9 May 2021
● Ex-dividend date: Monday, 10 May 2021 TAQA dividend policy
● Record date: Sunday, 16 May 2021
Dividends1 (US$ million)
● Payment date: Sunday, 30 May 2021 765 (paid) 842 918
DPS (fils/share)
2021 dividends expected to be split across interim and final amounts as follows: +10% p.a.
● 20% first interim dividend post Q1 results (0.55 fils/share or US$ 168 million) 3.00
2.75
2.50
● 20% second interim dividend post Q2 results (0.55 fils/share or US$ 168 million)
● 20% third interim dividend post Q3 results (0.55 fils/share or US$ 168 million)
● 40% final dividend post-AGA (1.10 fils/share or US$ 337 million)
2020 21 2022
We remain committed to maintaining solid investment grade ratings on a standalone basis,
as previously communicated 1. Proposed dividend payouts of indicated financial years
37FY 2020 proforma results
FY 2020 results – summary
Significant COVID-19 impact on oil and gas segment absorbed by expanded utilities business
Full year proforma consolidated financials post ADPower asset transfer Group financial highlights (US$ million)
Revenues
Strong operational performance amidst COVID-19 circumstances FY 2019 11,953
● High technical availability levels maintained for power and water businesses FY 2020 11,205
● Oil and gas production slightly lower on delayed drilling campaigns EBITDA
FY 2019 4,986 42% margin
Financial performance significantly impacted by lower commodity prices 39%
FY 2020 4,358
● Revenue of US$ 11.2bn (-6% y/y)
Net income (TAQA-share)
● EBITDA of US$ 4.4bn (-13% y/y) with margin compression to 39% (from 42% FY 2019)
FY 2019 1,480
reflecting lower margins in the Oil & Gas segment
FY 2020 759
Net profit (TAQA-share) of US$ 759mn for FY 2020 CAPEX
● Driven by lower revenues partially offset by lower operating and administrative expenses FY 2019 1,359
FY 2020 1,101
● Further impacted by Q1 2020 impairment charges partially offset by lower finance costs
(debt amortization and floating rate RCF) and other gains Gross debt
YE 2019 21,173
Recommended total dividend of US$ 765mn for FY 2020 implies close to 100% payout
YE 2020 20,696
39FY 2020 proforma consolidated results – basis of preparation
Transco as the accounting acquiror, acquisition accounting and focus on proforma financials
New TAQA Group structure
Acquisition accounting applied for purposes of the merger
Existing TAQA assets
● Acquired assets/liabilities are remeasured to fair value as of 1 July 2020 TAQA
(as legal acquirer)
● Chosen over predecessor accounting, where historical book values are used
UAE Int’l Oil ASOs
● Fair value approach adopted in light of recent market developments IWPPs Generation & Gas & JVs
Assets transferred
to TAQA Al Maqam Energy
Transco, the transmission operating company, determined as ‘accounting acquiror’ (transaction SPV)
● Highest fair value among candidates TAQA, Transco and ADDC TransCo 10% TAQA
4x UAE
(Acc. 2x DisCos IWPPs +
IWPPs
● Applying acquisition accounting results in all entities, except Transco, being fair valued acquirer) RO / PV2
on TAQA books
Statutory financial statements (FY 2020*)
Focus on proforma financials to enable like-for-like comparisons
statement
Transco New TAQA PPA
Income
New TAQA
● With Transco as the accounting acquirer, TAQA adopts Transco’s historic financial results
6 months + 6 months + 6 months = FY 2020
Jan-June Jul-Dec Jul-Dec
prior to 1 July 2020 transaction date for published statutory IFRS reporting
Balance
● Proforma financials adjust financials to assume the transaction occurred on 1 January
sheet
New TAQA PPA New TAQA
+ as at Dec
+ as at Dec
= as at Dec
2019 and back-dates impact of purchase price allocation (fair valuation exercise)
* Comparative 2019 financials are of Transco standalone
40Q&A session
Appendix A Additional slides related to Abu Dhabi power and water sector
Abu Dhabi I(W)(P)P framework
Business model for the Generation segment in the UAE
● Each UAE IWPP has a similar project structure as outlined below
● Long-term (power) (and) (water) purchase agreement (PWPA) with EWEC, which provides very stable cash flows
TAQA [Local Partner]
Local Partners [International [International [International
HoldCo Partner] Partner] Partner]
60% [x]% [x]% [x]%
Off-taker:
EWEC
20 to 30-year
(single buyer) (P)(W)PA
Project Co Lenders
Fuel Supplier: 20 to 30-year FSA
EWEC
Engineering, Long-term Service
Procurement and Agreement O&M Agreement
Construction (EPC) (LTSA)
43
Sources: Abu Dhabi Department of Energy Regulation & Supervision Bureau (now superseded by the Abu Dhabi Department of Energy)Abu Dhabi power and water sector dynamics
Material flow
Abu Dhabi Department of Energy Contractual flow
(formerly the Regulation and Supervision Bureau, RSB)
Fuel: MAR
Balance (MAR Abu Dhabi
less tariffs) Department
ADNOC Firm gas supply
Emirates Water & Electricity Company (EWEC) of Finance
contracts
Tariffs
DEL Buy all capacity and Consumers:
P&W, under PPAs BST
Commercial
Generation I(W)(P)Ps: Transmission: Distribution:
TUoS Household
11x TAQA I(W)PPs ADDC
P&W P&W
TRANSCO
3x I(W)(P)Ps Industry
P&W AADC
(under development)
Note: I(W)(P)P = Independent (Water) (and) (Power) Producer; P&W = power and water; TRANSCO = Abu Dhabi Transmission & Dispatch Co.; ADDC = Abu Dhabi Distribution Co;
AADC = Al Ain Distribution Co; ADNOC = Abu Dhabi National Oil Co.; DEL = Dolphin Energy Ltd.; BST = Bulk Supply Tariff; TUoS = Transmission Use of System; MAR =
Maximum Allowed Revenue, as defined by the First Regulatory Controls 1 (RC1) framework; (P)(W)PA = (Power) (and) (Water) Purchase Agreement
44Appendix B Additional slides related to Q1 2021 TAQA financial results
Transmission & Distribution highlights
Stable EBITDA margins and net income contribution
T&D highlights (US$ million)
High network availability and security of supply during the quarter
Regulated asset base (RAB)
● 97.8% for power and water transmission (98.2% Q1 2020)
YE 2019 22,513
YE 2020 21,820
Higher revenues offset by higher operating expenses
Revenues
● Increased revenues (+2% Q1 y/y) on higher pass-through costs incurred related to bulk Q1 2020PF 1,565
supply tariffs paid by the distribution businesses Q1 2021 1,595
● Fully offset by higher operating expenses (+4% Q1 y/y)
EBITDA
● EBITDA of US$ 561 million (+2% Q1 y/y) supported by lower administrative costs Q1 2020PF 552 35% margin
(-16% Q1 y/y)
Q1 2021 561 35%
Net income (consolidated)
Net income contribution to the Group of US$ 302 million (+3% Q1 y/y)
Q1 2020PF 292
Q1 2021 302
Capex significantly higher (+59% Q1 y/y) on accelerated spend in comparison to prior-year
period which saw project cancellations and deferrals driven by the COVID-19 pandemic. CAPEX
Q1 2020PF 153
Q1 2021 243
46Generation highlights
Continues to be underpinned by contracted power and water generation
Generation highlights (US$ million)
Solid operational performance throughout the quarter
Global technical availability (%)
● Global technical availability at 88.7% (vs. 89.2% for Q1 2020)
Q1 2020PF 89.2%
● Reflects planned major outage within the Jorf Lasfar power complex in Morocco, offset by Q1 2021 88.7%
strong performance of the UAE fleet and Ghana
Revenues
Robust profitability across the portfolio Q1 2020 785
● Overall power and water generation revenues of US$ 766 million (-2% Q1 y/y), reflecting Q1 2021 766
lower capacity payments and reimbursement fuel revenues in Morocco due to the outage
EBITDA
● Lower revenues were more than offset by lower operating expenses (-17% Q1 y/y), partly Q1 2020PF 469 60% margin
reflecting lower fuel costs 66%
Q1 2021 505
● EBITDA of US$ 505 million (+8% Q1 y/y)
Net income (consolidated)
Net income contribution to the Group of US$ 36 million
Q1 2020PF -4
● Reflecting higher EBITDA and lower finance costs on amortizing project finance debt Q1 2021 36
Capex declined to US$ 23 million (-59% Q1 y/y) CAPEX
Q1 2020 55
● Reflecting higher comparative period spend in Q1 2020 on lifetime extension projects on
turbines within our Shuweihat S1 plant Q1 2021 23
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