By Stanley Carvalho
Japanese trading house Marubeni agrees to buy 40% of Emirates CMS Power for $140mn.
Japanese trading house Marubeni has agreed to buy a stake in a power company in the UAE for $140 million, the seller said on Monday, the company's second acquisition in a UAE utility.
Marubeni will buy 40% of Emirates CMS Power, which operates the Taweelah A2 power and water desalination plant in Abu Dhabi, state-controlled Abu Dhabi National Energy (Taqa) said in a statement.
Taqa owns 94% of the plant and state-owned Abu Dhabi Water & Electricity Authority (ADWEA) the rest.
Marubeni owns 14% of another power project in Abu Dhabi, Taweelah B.
Abu Dhabi is the second Gulf Arab oil producer to open its utility industry to foreign ownership in a bid to reduce development and operational costs.
Demand for power in the world's largest oil-exporting region is surging on population growth and commercial and industrial expansion.
"Given the synergy Marubeni has with other operations in Abu Dhabi and to restore equilibrium to privatisation, Taqa sold 40%," Taqa Chief Executive Officer Peter Barker-Homek told Reuters by telephone.
Abu Dhabi has generally allowed foreign power developers such as Marubeni, International Power and GDF-Suez SA to own 40% of individual power projects.
"It is a signal to foreign investors that Abu Dhabi wants foreign investment," Barker-Homek said.
Taqa agreed in February to pay US utility CMS Energy $900 million for power assets in the Middle East, North Africa and India, including CMS's stake in Taweelah A2 and a second project in Abu Dhabi. - Reuters