ASSESSMENT OF TAQA AND BOARD MEMBERS FOR OPIC

C O N F I D E N T I A L SECTION 01 OF 02 ABU DHABI 000465

SIPDIS

SIPDIS

STATE PASS OPIC/OPIC PORTFOLIO MANAGEMENT DIVISION
SCHMITZER AND NGUYEN
DEPARTMENT FOR NEA/ARP, EEB/IFD/OIA

E.O. 12958: DECL: 03/19/2017
TAGS: ECON EINV ENRG EFIN AE
SUBJECT: ASSESSMENT OF TAQA AND BOARD MEMBERS FOR OPIC

REF: A. MARCH 7 OPOIC MEMORANDUM REQUEST


B. ABU DHABI 193

C. 06 ABU DHABI 4579

D. 06 ABU DHABI 4360

E. 04 ABU DHABI 3412

Classified By: Ambassador Michele J. Sison for reasons 1.4 (B & d).


1. (SBU) Embassy offers the following comments about the Abu
Dhabi National Energy Company (Taqa),the Abu Dhabi Water and
Electricity Authority (ADWEA),the Farmers' Fund, and board
members in response to ref a request for information. We do
not have any information on the entities or individuals with
respect to potential ties to terrorism, money laundering,
corruption, or violations of law. We do have some contextual
information on the institutions and on some of the
individuals that we provide for OPIC's information.


2. (C) Abu Dhabi, the richest and most powerful of the seven
emirates that make up the UAE, has been engaging in a
cautious process of partial privatization of some of its key
infrastructure. These partial privatizations allow the
government to maintain majority ownership but to bring in
foreign partners and/or to develop the local stock market
further and spread the benefits of equity ownership among UAE
nationals. Board members for these parastatal companies tend
to be from key families and/or are trusted senior government
officials. The Chairman of Taqa and the Chairman of ADWEA
are, for example, both members of the Emirate of Abu Dhabi's
cabinet -- The Executive Council. The Chairman of ADWEA is a
member of the ruling family of the Emirate of Abu Dhabi. The
Executive Council determines how Abu Dhabi's oil wealth is
spent. (Note: Abu Dhabi has around 95% of the oil and gas
reserves in the UAE. Constitutionally oil and gas reserves
belong to the individual emirates in which they are located,
not to the UAE as a whole. By virtue of the emirate's
wealth, Abu Dhabi provides much of the funding for the UAE
federal government and almost all of the foreign assistance
provided in the name of the UAE.


3. (C) Although UAE companies and financial institutions
understand the requirements of due diligence, there is
sometimes a sense of deference to large, well-established
families -- including many of those on the boards of Taqa,
ADWEA, and the Farmers' fund. In the past UAEG officials
have also noted that -- as a friendly government --
consideration should be given to their parastatal companies
and government investors. During the debate on DP World, the
UAE pushed for positive USG statements on the relationship.
It is possible that the UAEG would make a political push for
having OPIC maintain its loan to the power project in Morocco
that Taqa has bought into. Although the UAEG has stressed
that the ultimate failure of the DP World purchase of port
assets in the U.S. was a commercial issue and would not
affect the bilateral relationship, they have taken pains to
comment that the action could serve to discourage investment
in the U.S. It is also possible that Abu Dhabi will just pay
off the loan rather than subject the Taqa/ADWEA/Farmers' Fund
board members to excessively intrusive scrutiny.

Corporate Entities
--------------


4. (U) Taqa is an Abu Dhabi energy company, established in
2005, that is majority owned by the government of the Emirate
of Abu Dhabi (the richest of the seven emirates in the United
Arab Emirates). The Abu Dhabi Water and Electricity
Authority owns 51% of the company and the Farm Owners' Fund
owns a further 24.1% of Taqa. The remainder of the shares
are traded on the Abu Dhabi Stock Market, but are only open
to investment by UAE nationals. Taqa, through its
subsidiaries, provides about 85% of the water and electricity
in the Emirate of Abu Dhabi and is becoming a vehicle for the
Emirate of Abu Dhabi's overseas energy investments.


5. (SBU) The Abu Dhabi Water and Electricity Authority
(ADWEA) was established by the Government of the Emirate of
Abu Dhabi to oversee the restructuring of the Emirate's water
and electricity sector and to supervise the government's
efforts to partially privatize the sector. ADWEA is a
government of Abu Dhabi institution. Embassy has had
discussions with ADWEA in its government capacity over the
past two years. ADWEA was designated as the Abu Dhabi entity
responsible for organizing the shipment of two used
generators to Iraq to meet Iraqi power needs. Ultimately,
the UAE did not provide these generators to Iraq. In 2004,
post discussed Abu Dhabi's exploration of building a nuclear
power plant for power and water generation. ADWEA signed an
MOU with the South Korean Ministry of Science and Technology

ABU DHABI 00000465 002 OF 002


to conduct a feasibility study on nuclear power for
electricity and desalinization.


6. (C) The Farmers' fund was created by the Abu Dhabi
government to provide an income stream to Abu Dhabi farmers.
In 2005, the Emirate of Abu Dhabi apparently began to phase
out some of its direct subsidies to farmers (which had put
significant stress on ground water reserves). The farmers'
fund helps to ensure that Abu Dhabi farmers continue to
receive an income stream.

Individuals
--------------


7. (C) Sheikh Diyab bin Zayed Al-Nahyan is the 16th son of
the late UAE President and Founder Sheikh Zayed Al-Nahyan and
a half-brother of the current president. He was born in 1972
and attended UAE University. He was appointed to the Abu
Dhabi Executive Council in 2005.


8. (C) Hamad Al-Hurr Al-Suwaidi is the Under Secretary
(number two) of the Abu Dhabi Department of Finance and a
board member of Abu Dhabi's major overseas portfolio
investment vehicle, the Abu Dhabi Investment Authority
(ADIA). He is also a member of the Emirate Executive
Council. He was born in Abu Dhabi in 1965 and studied in
the U.S. on a scholarship. He obtained his B.S. in Business
Administration from Dominican College in 1987 and his
Master's in Financial Management from California State
University San Bernardino in 1991. He worked in the North
American department at ADIA, and as Deputy Manager of ADIA's
London office from 1992-94. He then worked as deputy manager
at ADIA's European department. In 1996, he moved to the
Department of Finance where he served as Assistant Under
Secretary until his appointment as Under Secretary in 2004.

SIPDIS
Al-Suwaidi has been a good contact for the Embassy,
approachable and knowledgeable. Within the context of his
job, he is also remarkably open and candid.


9. (SBU) Ahmed Saif Al-Darmaki, the Vice Chairman of Taqa,
has been an occasional contact of the Embassy's since 2004 on
several issues discussed above. We have found him to be
generally willing to meet and have discussions within his
area of competence.
SISON