Mubadala eyes investment in gas networks, infra

In an interview Mubadala CEO stated that the fund, which already has investments in India’s renewable energy sector through Tata Power Renewables, is also keen on further investment opportunities in the country’s green energy sector, given its strong potential.

Rituraj Baruah
Updated1 Apr 2023
Khaled Abdulla Al Qubaisi, CEO, real estate and infrastructure investments,  Mubadala.
Khaled Abdulla Al Qubaisi, CEO, real estate and infrastructure investments, Mubadala.

New Delhi: Mubadala Investment Co., the sovereign wealth fund of the United Arab Emirates, is eyeing gas assets in India’s expanding city gas distribution network, as well as investments in infrastructure and highways. In an interview, Khaled Abdulla Al Qubaisi, CEO of real estate and infrastructure investments at Mubadala, stated that the fund, which already has investments in India’s renewable energy sector through Tata Power Renewables, is also keen on further investment opportunities in the country’s green energy sector, given its strong potential. Mubadala will focus on gas assets, highways, and renewable energy in India in the years ahead, he said, adding that Mubadala’s investment portfolio is still at a nascent stage and the UAE sovereign fund is focused on increasing its investments in India. Edited excerpts:

With the growth of renewables and infrastructure sectors in India, how significant is the Indian market for you?

[We found] that opportunity during covid. We deployed at that time with Jio. We followed on and deployed capital in the retail business. We also identified renewables, infrastructure, and highways as interesting areas for us. We are going that way and identifying major themes and areas. For example, digital transformation, renewables, and energy transition are important for India. Infrastructure, in general, is important, and highways are the first one (sector) that we are comfortable getting into initially. We are looking at other areas within infrastructure as well, like gas networks and so on.

There are a lot of opportunities and a lot of potential to deploy capital. The most important thing is we select the right sector, themes and the right partner. We are going along that way, and we are really confident of deploying more as Mubadala already has around $4 billion in India. It’s nothing compared to our total size of nearly $300 billion. If you look at India’s GDP share, we (our investments) should be higher than that. So, I think you will see more deployment and more investment in India. Today, India is a quarter of our exposure in Asia, second only to China.

Is there a growth target for your India investments?

It’s very hard to predict what that would look like. We aim to represent India’s share of the world’s GDP. That’s how investment companies usually look at countries with high growth potential.

We have investments in Jio, which is a telecommunications company. We invested $1.2 billion in that company. We also invested $800 million in Reliance Retail. So, we have $2 billion invested in Reliance (Industries) in two of their businesses. We have also committed around $300 million to invest in infrastructure and highways in India. We also invested $225 million in Tata Renewables. We are looking at other opportunities as well as we speak in infrastructure and other sectors as well.

What are the new sectors you are looking at?

There are so many opportunities in the market. We are looking at other renewable opportunities. Infrastructure and highways are sectors we like. We may keep expanding and put in more capital in that area. The city gas network is something we have looked at recently. Currently, we are working with someone (on city gas distribution). We already have telecommunications and digital transformation. We are active in highway infrastructure. We want to do more.

What are your plans for investments in highways?

We are interested in investments targeting both assets already constructed and the building of new highways. Highways are very important for a country like India to progress and improve the economy in so many different areas.

As India has an ambitious energy transition plan, should we expect your footprint to expand in the green energy sector?

It’s extremely important. Today India is already the third largest energy consumer, only second to the US and China. It’s the fastest-growing energy market in the world. A lot of that energy is predominantly from coal-based plants. And a lot of that coal is imported, which burdens its fiscal policy greatly. So, when we are investing in this area, I think this will help actually convert the energy from coal into renewable, so there would be less pollution, less pressure on India’s budget by importing more coal. Its also going to be cheaper for the consumers. Our investment over there is not only in power generation, but we are looking at electric-powered water pumps for the agriculture sector with Tata Renewables, which should reduce the cost and pollution for a big and important sector in India. We are looking with Tata Renewables to expand EV charging infrastructure across the country, which will also reduce fuel imports which are India’s single largest import today and are heavily subsidized. We like the sector (renewable). We are looking to deploy more.

Can you share details on your plans for newer sectors of green hydrogen and energy storage?

We are looking at this whole area of energy transition. Anything that helps the country’s economy to move from coal and gas-based power plants is something of interest to us. Because it is beneficial for the planet, beneficial for the country, and also it actually gives good returns if you structure them well. We have invested in so many things around the world, including carbon storage and smart meters, which help monitor electricity consumption. So, these are all part of the energy transition, which we have done through Masdar. Mubadala has done a lot of these projects around the world, including renewables, battery storage and so on.

One of the main reasons behind establishing Mubadala is that we have a double bottom line, one is, of course, benefits around the world, but it has to be done in a sustainable way; otherwise, it will be difficult to continue. We invest around the world for both reasons, for improving situations, and one of them is climate change. Even our projects actually go through a filter, and one of those filters is being a responsible investor -- is it something good for the world? Is it something that may add to pollution? Is it something that will reduce pollution? It is like an ESG kind of filter for the company, for all of our investments.

Amid the Ukraine war and the energy crisis, several countries, including India, are going back to coal. Do you think energy transition is taking a back seat, and how would it impact green energy investment?

It’s important for any country embarking on this important journey to put in a strategy and create a long-term strategy. That should be a realistically driven strategy in terms of what is possible, what makes sense, and (they should)stick to it. And I think India is really doing a good job in that area, and it is working really hard. They are really serious about it. We just need to continue. Today already, renewables are commercially viable without subsidies.

You invested in the telecom and technology space with your investment in Jio. Are you looking at more investments in that space?

In technology, we have done a lot to date, about $2 billion between both telecommunication and digital retail business. For now, we are happy with that. If some opportunities come in the future, we will take a look. But we are happy. Because we went with big ticket investments. If you look compared to our normal investments are usually between $200-400 million, but as we really liked that opportunity with Jio and the digital retail business of Reliance, we went with big tickets knowing that it’s going to be hard to find some as great an opportunity presenting themselves soon in the market. So, we are not exactly looking at that space right now, but if something comes up, we will look at it.

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