Saudi Toyota distributor expands solar energy arm

The distributor of Toyota vehicles in Saudi Arabia is expanding its energy division after a key solar acquisition.

The Abdul Latif Jameel (ALJ) group, which also has assets in the financial, property and consumer sectors, will pursue further acquisitions in the renewables sector to support regional power growth while expanding the firm’s market share.

“Our intent [is] to become a leading player in the global renewables energy sector and give us a market leading position in solar power plant development,” said Mohammed Abdul Latif Jameel, group chairman and president.

ALJ’s strategy will be to complete a power project and after a period of five years sell the underlying assets and cash flow. It will then continue to maintain operational control and use the proceeds from the sale to fund further expansion.

Roberto de Diego Arozamena, the chief executive of its energy division, said the firm had “consciously decided not to enter into conventional power” to focus on renewable energy.

Last week, ALJ announced that it had purchased the Spanish firm Fotowatio Renewable Ventures, which added 4 gigawatts to its portfolio in Australia, Europe, South America and the Mena region, where it is active in Egypt and Jordan.

Under the acquisition, ALJ will keep the Fotowatio name and employees for its solar developments. The companies had been partnered for several projects since 2012, including on the last bid round for the latest phase of Dubai’s Mohammed bin Rashid Al Maktoum solar park.

ALJ and Fotowatio came in second behind fellow Saudi firm Acwa Power, which won the job with the lowest ever price for a utility scale photovoltaic (PV) project.

“The UAE is key because it’s moving faster than other markets,” said Mr Arozamena.

The UAE has set a target to generate 24 per cent of its total electricity from clean energy by 2030, which includes solar, wind and nuclear power. Dubai has doubled its own target to achieve 15 per cent of power from green energy by 2030.

At a press conference in Dubai on Sunday, Dubai Electricity and Water Authority’s managing director and chief executive Saeed Mohammed Al Tayer announced that it would offer new energy projects this year, including renewables.

ALJ anticipates itself to be a strong contender for work in the emirate.

“With the latest acquisition, we can be more competitive, and more flexible in the way we approach bids than in the past,” Mr Arozamena said. “In the rest of the GCC, as projects come up we intend to bid on them.”

The firm is also targeting acquisitions that can provide manufacturing facilities including solar panel production.

Companies with strong research and development capabilities are most attractive, said Mr Arozamena.

“There is no experience in the region in terms of renewable energy and the fastest way to go about it is to find knowledge outside and then enhance our local capabilities in the markets where we want to act,” he said.

Key criteria for any acquisition will be the quality of employees. “A pipeline is worth nothing without a team to execute it,” he said.

He said that ALJ is also exploring the possibility of establishing its own manufacturing plant in Saudi Arabia, which would create jobs and help distribute solar products throughout the Mena region more cost- efficiently.

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