Source says Abu Dhabi firm may invest in renewable power projects jointly with Germany's RWE
UAE-based green energy firm Masdar may invest in renewable energy projects jointly with RWE, Germany's second-biggest utility, a source familiar with the matter told Reuters on Wednesday.
RWE Chief Executive Peter Terium told Reuters on Tuesday the company was in talks with an Abu Dhabi investor but declined to reveal its identity.
"Masdar is in discussions about potential investments in renewable energy projects with RWE," the Abu Dhabi source said, declining to be named as the matter is not yet public. The source did not elaborate.
A spokeswoman for RWE declined to comment.
Facing 27.7 billion euros ($31.36 billion) of debt and a sharp drop in earnings at home, RWE is looking to reduce its exposure to conventional energy sources and expand its foothold in renewables.
Last year, coal accounted for 60 percent of RWE's electricity production, while renewables accounted for just 3 percent.
Analysts have noted that teaming up with a Gulf-based investor would be a good move for the 117-year old utility as it would give it access to a growing energy market, offsetting its stagnant European core market.
Terium did not rule out that talks could result in the investor taking a stake in the utility, but added this was currently not part of discussions.
Shares in RWE, which are down about a third so far this year, were up 2.4 percent at 1428 GMT, outperforming a 1 percent firmer STOXX Europe 600 Utility Index.
Unlisted Masdar is wholly-owned by Abu Dhabi investment fund Mubadala. Oil-rich Abu Dhabi, capital of the UAE, is investing billions of dollars in industry, tourism, real estate and renewable energy as it diversifies its economy away from oil.
In September, Masdar acquired a 35 percent stake in a 1.5 billion pound ($2.5 billion) offshore wind project in eastern England. This is Masdar's second big investment in the British offshore wind energy market. The company also has a 20 percent stake in the 630 MW London Array project, the world's biggest offshore wind farm.
Masdar, to which the oil-rich emirate's government has committed $15 billion, has also invested substantially in renewable energy projects in countries including Spain, Morocco, Mauritania and Afghanistan.