State-controlled Abu Dhabi National Energy Co said it planned to make energy acquisitions worth up to $3.5 billion in the next two years in countries such as Britain, Russia and India.
Taqa, as the company is also known, is looking to expand outside its United Arab Emirates base, where it partners with utilities such as International Power Plc and Suez in developing power and water desalination plants, Taqa Chief Executive Peter Barker-Homek told Reuters in a recent interview.
"Our aim is to create a blue chip company that is truly global," Barker-Homek said from San Francisco. "We'll probably do about three or four transactions valued at between $500 million and $1 billion each."
Taqa also has hired Goldman Sachs to advise on refinancing $6 billion of debt during the next 12 to 18 months to lower its borrowing costs, Barker-Homek said.
International banks submitted proposals in August to lend Taqa as much as $3 billion for between seven and 12 years, according to Taqa's Web site, which gave no more details.
Gulf Arab governments are reaping a windfall from oil prices, which surged in 2004 and 2005 to average $61.05 a barrel in New York, three times their 2001 average. Prices still have averaged $58.67 a barrel so far this year.
The UAE, Kuwait and Qatar are investing more abroad to diversify their assets and cushion against a decline in oil prices. Dubai has led the way with at least $12.5 billion of foreign acquisitions so far this year.
Taqa is interested in buying oil, gas and power generation assets and may make an acquisition within three months, Barker-Homek said, declining to be more specific.
The state-controlled company, which raised $163.05 million in an initial public offering last year, bought 1 percent of Russia's Rosneft this year, Middle East Economic Survey reported last month. Rosneft raised $10.4 billion in an IPO in July, at the time a record for Russia and the world's fifth-biggest.
Taqa has controlling stakes in five power and water stations that account for 85 percent of the electricity and 90 percent of the water desalination capacity of the emirate of Abu Dhabi, according to Standard & Poor's ratings company. Abu Dhabi has a population of about 1.4 million.
S&P this month gave Taqa a corporate credit rating of A+/A-1, and Moody's Investors Service rated it Aa3 for dollar bonds and Eurobonds the energy company plans to sell.
Taqa is the latest Abu Dhabi government-controlled entity to go on the hunt for international acquisitions. Mubadala Development Co last year bought 5 percent and 17 percent of sports car makers Ferrari and Spyker, respectively.
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