Abu Dhabi National Energy Company (TAQA) Investor Presentation

POWERING A THRIVING FUTURE

Disclaimer

These materials have been prepared by Abu Dhabi National Energy Company PJSC ("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 The information contained herein supersedes any previous such information delivered to you and will be superseded by any such information subsequently delivered.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.

TAQA publishes its financial statements in AED rounded to the nearest million. This presentation contains conversions of certain AED amounts into U.S. dollars solely for the convenience of the reader. These conversions should not be construed as representations that the AED amounts actually represent such U.S. dollar amounts or could actually be converted into U.S. dollars at the rate indicated. The UAE dirham has been pegged to the U.S. dollar at a fixed exchange rate of AED 3.6725 = U.S.$1.00 since 22 November 1980 and, unless otherwise indicated, U.S. dollar amounts in this presentation have been converted from AED at this exchange rate.

Please note that rounding differences may appear throughout the presentation.

22

Table of contents

  1. A leading integrated utility, underpinned by strong, recurring cash flows
  2. Recent strategic developments
  3. Integrating ESG into how we do business
  4. Maintaining strong financial performance
  5. Investment thesis
  6. Appendix

4

10

13

18

21

23

3

A leading integrated utility, underpinned by strong, recurring cash flows

POWERING A THRIVING FUTURE

A leading integrated utility at the heart of UAE's energy ambitions

1

Building a global business upon

solid foundations in UAE

Exclusive

Right of

22

1st refusal

Countries

Transmission for

For a minimum of

Global footprint

Abu Dhabi and

40% stake in

through power

Northern Emirates

EWEC generation

generation and

Distribution for

projects in the

O&G assets.

UAE

Abu Dhabi

2

Operations spread across three

3

Strong financial performance &

business lines

predictable cash flow generation

H1 2023 REVENUE SHARE

$7.3bn

$2.9bn

117

~110,000 km

5% YoY

7% YoY

mboe/d

18%

water &

H1 2023 Revenue

H1 2023 EBITDA

production

electricity

T&D

networks

Generation

58%

41%

61%

37.4 GW1

24%

O&G

1,060 MIGD

gross power

gross water

Average Adj.

FCF-to-EBITDA ratio

generation

desalination

EBITDA margin

H1 2023

capacity

capacity

2020-2022

4

Robust borrowing profile with good

liquidity levels

5

Transparent dividend policy

6

ESG embedded in Group strategy

with a path to net-zero by 2050

Aa3

AA-

12%

2.6x

Liquidity as a % of

Net debt / LTM

Defined dividends from

T&D and Generation

(fils/share)

2023P

2024F

2025F

3.25

3.50

3.75

Variable

payout over

2023-2025 from O&G business

Discretionary

percentage of net

income

2022 highlights

8%

16%

27%

YoY reduction in

YoY reduction in

Female board

total assets (Jun 23)

EBITDA (Jun 23)

Maintaining standalone investment grade rating

  • Fixed dividends to be paid quarterly
    • Variable dividend at year end

Scope 1 & 2 GHG

intensity based on

members

emissions

revenue

16% women in

management

5

1. Based on operational and under construction capacities. Includes Masdar generation capacity. Excludes 1GW captive capacity in Oman

TAQA a key driver of the energy transition in Abu Dhabi

A deliberate shift towards cleaner energy sources

Planned power generation

Installed generation capacity by

structure in Abu Dhabi

type across EWEC network

Nuclear

  • Base load for Abu
    Dhabi's power generation
  • TAQA provides Transmission & Distribution connectivity
  • TAQA does not own the Barakah Nuclear Energy plant

Solar

  • Intermittent power supply source
  • TAQA has a key stake in all PV plants

Gas

  • TAQA has a key stake in all Gas plants

90%

80%

80.1%

70%

68.9%

60%

50%

40%

30%

20%

14.7%

15.2%

15.8%

10%

5.3%

0%

Nuclear

Solar

Gas

2022

2030F

Source: EWEC

6

Well-articulated strategy to become a low carbon power and water champion focused on optimization and growth

MISSION

To be a low carbon power and water champion

Key 2030 targets

VISION

PURPOSE

STRATEGIC PILLARS

To provide the clean power and water that governments, businesses and consumers need for a sustainable and successful life

Powering a thriving future by efficiently providing sustainable and reliable energy and water to unleash the unlimited potential of people and places

Optimization

Growth

• Increase gross power capacity to 30 GW

in the UAE (currently 20.1GW1) and 20

GW internationally (currently 4.1GW2)

by 2030

• Renewable energy portfolio to

comprise >30% of power generation

• Reverse osmosis technologies to make

up 2/3 of desalination capacity

• Invest AED 40bn (~$11bn) in

Transmission & Distribution by 2030,

KEY THEMES

Create an integrated

and efficient utility

company

Partner with the government to establish optimal regulatory system

Enhance security of supply to maintain demand growth in UAE and internationally

Expand product

portfolio

Become a sustainable

leader and

decarbonization

partner in the UAE

to maintain and grow RAB in the UAE

• Sustaining O&G production

capacity

across

Canada

&

Iraq,

while

decommissioning certain assets in the

North Sea

• Build depth into our capabilities

through project development, delivery

and operatorship in Generation, which

will facilitate value

preservation and

ENABLERS

Capability Building

Develop people capabilities for

sustainable growth

Financial discipline

Ensure financial stewardship

ESG

Become the UAE's ESG champion sustainably delivering on our corporate strategy and objectives

Innovation & Digitization

Enable optimization of existing

business and ability to

innovate for growth in new

business models

creation.

• Commitment to maintain standalone

investment grade rating

7

Breakdown of TAQA's power generation capacity

Share of clean energy increasing in portfolio

Technology mix

Gross capacity (GW)

37.4

10.7

24.2

5.0

14.8

26.7

19.27.3

7.51.6

TAQA

Masdar

Elimination

TAQA +

(joint project)

Masdar

Current Portfolio (Operating + U/C)

Operational Under construction

Net capacity (GW)

17.1

14.3

3.6

1.9

12.4

2.8

13.5

1.7

1.1

TAQA

Masdar

TAQA + Masdar

(TAQA Share)

Current Portfolio (Operating + U/C)

Operational Under construction

(gross capacity)

Geothermal Other

Coal 5.0% 0.6% 6.2%

Wind

11.5%

Clean

energy at

~43% of

portfolio Thermal

51.1%

Solar

25.5%

Technology mix

(net capacity)

Geothermal Other

Wind 0.7% 0.3% 5.3%

Coal

12.0%

Clean

energy at

Solar

~24% of

portfolio

17.7%

Thermal

64.0%

8

Cash flow stability entrenched in TAQA's business model

T&D

GENERATION

Building blocks of Maximum Allowed Revenue (MAR):

RoI on Regulated

Incentive

Asset Base (RAB)

BST + Opex

structure

+ Depreciation

• Real WACC increased from 4.6% to 4.9% for Regulatory Control 2 (RC2) period (2023-2026)

• Annual nominal RoI on RAB: WACC + previous year's CPI

  • Entire domestic and international generation fleet operates under long-term take or pay contracts with highly credible off-takers
  • Compensation composed of Capacity Payment and Variable
    Payment
  • Capacity Payment is dependent on availability (rather than off-take) and includes recovery of capital and return on capital
  • In addition to compensation for variable operating costs, Variable Payment includes recovery of fuel cost on a pass-through basis in select markets.

H1 2023 Revenue breakdown

H1 2023 EBITDA breakdown

18%

24%

• Contracted: Local and

international power generation

41%

assets

• Regulated: Transmission &

58%

24%

Distribution companies (licensed

activities)

Contracted + regulated:

c.82% of Revenue

36%

• Other: Oil & Gas, unregulated

transmission activities, merchant

Contracted + regulated:

generation assets

Regulated Contracted

Other

c.78% of Adj. EBITDA

9

Recent strategic developments

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Disclaimer

TAQA - Abu Dhabi National Energy Company PJSC published this content on 23 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 October 2023 07:16:34 UTC.