The Abu Dhabi pension fund’s $1.1 billion investment in Adnoc’s Pipelines will deliver solid, long term returns to the fund’s stakeholders, UAE Minister of State, Member of the Federal Cabinet, and Adnoc Chief Executive Dr Sultan Al Jaber said. This is the first time that a UAE domestic institutional investor has pumped in long term equity capital into the Arab nation’s energy infrastructure, the UAE media reported.
The Abu Dhabi Retirement Pensions and Benefits Fund is set to take a 3 percent stake in Adnoc’s Pipelines. Adnoc Pipelines receives tariffs from Adnoc.
In February, KKR, one of the world’s top asset managers, paid $4 billion to lease a few of Adnoc Pipelines. US-based Blackrock Capital and KKR together own 40% in Adnoc Pipelines and Adnoc holds 57%. Adnoc had agreed to lease 18 pipelines spanning 750 kilometres for 23 years to two investors through a special purpose vehicle in February, 2019.
Adnoc Pipelines is the special purpose vehicle that manages partnerships and receives tariffs from Adnoc. The UAE energy company will invest returns from the pipeline infrastructure deal in future projects or pay them as dividends to the Abu Dhabi government.
Adnoc’s deals with the two US asset managers and the current pension fund deal are part of a commercial business strategy followed the company since Dr. Sultan Al Jaber became the CEO in 2016.