Engie eyes investments in district cooling and renewables in the Middle East
The French utility invested approximately Dh2.8bn in Mubadala's district cooling venture Tabreed in 2017
French utility Engie is looking at growing its portfolio in district cooling in the Middle East as it also looks to actively bid on renewables projects in the region, according to its chairman.
"We're looking at growing with existing facilities and new customers, developing greenfield facilities but yes, acquisitions are also on the table," Jean-Pierre Clamadieu told The National in an interview in Abu Dhabi.
"We have a strong commitment to Abu Dhabi and the Emirates in general and there are opportunities in Saudi [Arabia]. We're already operating in Saudi [Arabia] and we're also looking at opportunities there," he added.
In 2017, Engie invested approximately Dh2.8 billion in Mubadala Investment Company's district cooling venture Tabreed, taking a 40 per cent stake in the firm.
The GCC is a major contributor to the group's overall revenue, with a share of 28 gigawatts of the total capacity of 103GW globally, according to Engie's Middle East, South & Central Asia and Turkey chief executive Sébastien Arbola.
"If regulatory frameworks remain as attractive as they have been for the past 30 years, Engie will continue to invest in the region," he added.
The French company has made some strategic strides in the region, notably with the appointment of key executives with extensive backgrounds in clean energy to its Middle East portfolio.
In Saudi Arabia, Engie appointed Turki Al Shehri, the first head of the kingdom's newly-established Renewable Energy Project Development Office, to the position of chief executive.
In the UAE, Engie-venture Tabreed has Bader Al Lamki, who was earlier responsible for driving Masdar's clean energy business, as its new chief.
Engie's regional appointments come amid an increasing push among oil exporting states of the Gulf to add more renewable capacities to grid, as they look to free up more oil for export. Saudi Arabia, the world’s largest oil exporter is looking to add up to 40GW of capacity in photovoltaic and 3.2GW in concentrated solar over the next decade. Dubai, for instance looks to generate 25 per cent of its energy requirements from renewable sources by 2030 and 75 per cent by 2050 as part of its clean energy drive.
While renewables form around 15 per cent of Engie's portfolio globally, it is a segment the French utility is keen to grow.
"We want to increase it significantly. Again we see renewables as a way to support our client solutions business," said Mr Clamadieu.
In the Middle East, Engie is "actively bidding on projects in wind and solar", he added.
The company has a strong position in wind, both inland and offshore, and is looking to continue to grow in this segment, he observed.
Earlier this year, Engie joined forces with Spanish renewable energy firm EDPR to form a joint venture in offshore wind.
The companies will combine their existing installed capacity of 1.5GW in wind and 4GW under development and will look to reach 5 to 7GW of projects in operation or construction and 5 to 10GW under advanced development by 2025.
Saudi Arabia, which has looked at developing offshore wind, could also be of interest, said Mr Clamadieu, noting that the sector was "very significant" in terms of generation capabilities globally.
Engie is spending €11 billion (Dh44.6bn) over the next three years as it plans to deploy up to 9GW capacity of renewables. Of the planned capex spend, €4bn-€5bn will be spent on client solutions, €2.3-€2.8bn in renewables, €3bn in developing networks and the rest will be deployed in thermal power generation.
"The priority of the group is customer solutions. We have a very large position there and almost €20bn of sales in businesses where we support customers, corporate and local governments with energy projects in the form of services and in some cases associated with capital expenditure in infrastructure," said Mr Clamadieu.
Updated: October 12, 2019 06:35 PM