TAQA joins $37.3m funding round for clean energy startup Xlinks

TAQA, also known as Abu Dhabi National Energy Company, has joined a $37.3m (GBP30m) funding round for Xlinks, a British-based clean energy startup that seeks to build the world’s longest undersea cable to help meet future UK energy needs.

The Abu Dhabi-listed energy firm said it invested GBP 25m (Dhs113m) in Xlinks while Octopus Energy Group, one of the UK’s biggest residential gas and electricity suppliers invested GBP5m in the clean energy company.

“With this funding, Xlinks will undertake the development of plans to lay the world’s longest high-voltage direct current (HVDC) subsea cables between the UK and Morocco, passing Portugal, Spain and France,” TAQA said in a bourse filing on Wednesday.

TAQA Group and @OctopusEnergy announced investment into @xlinks_uk‘s first-of-a-kind project that will utilize TAQA’s renewable energy and infrastructure expertise to bring 3.6GW of renewable energy generated in Morocco to the UK. pic.twitter.com/xNrEsjaQ8e

— TAQA (@TAQAGroup) April 26, 2023

The Morocco-UK Power Project is one of several first-of-a-kind long-distance renewable energy generation and cross-border export projects being planned globally to address the growing demand for firm power capacity.

TAQA backs Morocco-UK Power Project

Xlinks will supply the UK with 3.6 gigawatts (GW) of renewable energy-sourced electricity amounting to nearly 8 per cent of the nation’s current requirements and enough to power seven million British homes by the end of the decade.

The electricity will be generated in the Guelmim Oued Noun region of Morocco by a 10.5GW facility of solar and wind farms, supported by 20GWh/5GW of battery storage.

The facility will be connected to the UK power grid in Devon, South West England, via four 3,800km subsea HVDC cables, which will be manufactured in the UK. This project will rely on the Moroccan renewable energy expertise whilst supporting its leading role globally in the fight against climate change and providing further value to its natural resources and reinforcing its renewable energy export strategy.

Read: UAE utility firm TAQA sets up green finance framework

The clean energy project will create around 10,000 jobs in Morocco during construction and lead to significant foreign direct investments in the North African country.

TAQA’s sustainability drive

Meanwhile, TAQA’s investment in Xlinks follows the utility firm’s issuance of a $1.5bn dual-tranche bond, its first green bond following the launch of its new green finance framework.

TAQA said it would use the proceeds from the issuance of the $500m five-year tranche will be used for general corporate purposes while the $1bn 10-year green bond will be used to finance projects as set out in the framework

The company unveiled its green finance framework for the issuance of green bonds, Sukuks, loans and other debt instruments earlier in April. It said proceeds from the issuances will be used to finance eligible green projects including renewable energy, energy efficiency, sustainable water and wastewater management as well as clean transportation, terrestrial and aquatic biodiversity.

TAQA said its green finance framework is aligned with the global best practice set out under the four core components of the Green Bond Principles 2021 that was published by the International Capital Market Association.

The company aims to make renewables 30 per cent of its share of generation by that date, which it said had been accelerated by its acquisition of a 43 per cent stake in the renewables business of fellow Abu Dhabi-based company Masdar.

Read: Abu Dhabi’s TAQA sells $1.5bn in dual-tranche bonds

The utility firm unveiled its 2030 ESG Strategy in October 2022 with interim greenhouse gas emissions reduction goals of 25 per cent of scope 1 and 2 emissions and a 33 per cent reduction of UAE portfolio emissions, with 2019 as the baseline.

The sustainability strategy covers the company’s interim greenhouse gas emissions reduction goals and is a credible step towards achieving its net-zero ambitions by 2050.