Interview: Khalid Mohammed Jolo
What are the key indicators used when evaluating projects to potentially invest in?
KHALID MOHAMMED JOLO: The key performance indicators used for our investment criteria vary from project to project. We present ourselves to the market as a developer that owns and operates power plants, meaning that whenever we invest we are not solely a financial investor, but we intend to play a substantial role in the operation and management of the company. This is a very important factor for us when evaluating investment opportunities. Other factors include the risk matrix of a particular project, whether or not it is a merchant asset, the availability of committed off-take, the rating of the country where the project is located, the technology being used for the project, and so on. Ultimately, we have stated that we will consider investing in any type of power and water project aside from nuclear. Renewable energy is a key area of interest for us. In addition to the solar project in Jordan, we are in the final stages of closing an investment in a 205. 5-MW wind farm in the US. We are also bidding for a number of solar projects in the region.
How do you assess the overall development of the investment portfolio since your founding?
JOLO: Nebras Power was founded only two years ago, so we consider ourselves a new player. Before Nebras was established in 2014, there were several companies in Qatar investing internationally in power and water assets. Combining the resources, knowledge and experience of its three founding shareholders - Qatar Electricity and Water Company, Qatar Holding and Qatar Petroleum International, Nebras Power was created to invest globally in power generation and water desalination assets on behalf of its parent companies. To date, we are very happy with the development of our portfolio. We have almost 1 GW spread across different regions and across different technologies. Our first investment was in a renewable project in Jordan, where Nebras is jointly developing the 52. 5-MW Shams Ma’an solar power plant, in which it holds a 35% stake. In addition to this, we have two other existing investments in Jordan, including two independent power projects (IPPs) in East Amman – IPP1, where Nebras owns a 23.38% stake, and IPP4, where Nebras holds a 24% stake. We also invested in Oman by acquiring nearly 10% of the company that owns and operates the 2000-MW Sur IPP. Additionally, we recently managed to sign agreements for projects in Abu Dhabi and Tunisia, but these have not closed as of yet. We are also currently in advanced discussions for a few other projects in different locations, but the details have yet to be finalised. Our 10-year business plan dictates moderate growth, where we aim to add 800-1000 MW of power to our portfolio every year, spread across a range of technologies. We have been given the initial capital of $1bn, and additional cash injections will be evaluated as needed, to support the company’s growth in international markets.
To what extent will the global investment strategy focus on the acquisition of existing projects versus greenfield investments?
JOLO: As a developer of power generation assets, our preference is for greenfield projects. They offer premium returns over the long term and provide greater access to the industry know-how, skills, and technology. However, a greenfield development is typically a multi-year investment, which inevitably delays dividend distribution. As a newcomer with a strong focus on generating returns and cash flow for the shareholders, we are prioritising acquisitions. Over time, our focus will shift, with an aim of having approximately 60-70% of our portfolio in greenfield investments. We intend to invest in countries with an active IPP presence and robust, bankable power purchase agreements. Our first preference at the moment is the MENA market, followed by South-east Asia.
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