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Abu Dhabi Mulls Bond to Finance $2.5 Billion Power Project
ABU DHABI - Abu Dhabi will issue a bond to raise money for a $2.5 billion electric power project currently being constructed in the emirate, in case current negotiations with banks for securing long-term financing fail, a top official said.
Abu Dhabi Water and Electricity Authority, or ADWEA, last year awarded a contract to build the Shuwaihat- 2 power plant to GDF-Suez Electricity Company, a Belgium-based energy firm. The plant aims to generate 1,500 megawatt of electricity and produce 100 million gallons of water per day.
The Abu Dhabi Water and Electricity Authority has 60 per cent stake in the project, and GDF Suez Electric Company owns the rest .
There were delays in securing finances for the project due to the tough credit situation in the market, in the wake of the global financial crisis.
However, in December last year, ADWEA raised a $900 million bridge financing for a tenor of 10 months to kick start the project to meet the deadline of 2011 to start generating electricity from the plant.
“The construction activities have already started on the site in Shuwaihat area and there is sufficient funds available to the meet the project requirements until September, Shankar Krishnamoorthy, Chief Executive Officer of GDF Suez Electric Company, told Khaleej Times.
“We have different options to raise money for the project in the current tough financial conditions. It includes issuing a bond or seeking finances from bilateral lending agencies”, said Abdulla Saif Al Nuaimi, director of privatisation at Abu Dhabi Water and Electricity Authority. He spoke to reporters after giving a keynote speech at the two-day Arabian Water and Power Conference organised by MEED magazine.
He said that Abu Dhabi would continue to invest in its electricity and water infrastructure to meet the growing needs of the emirate in the years to come.
Al Nuaimi said that the authority has yet to decide on another project to generate 1500 megawatt of electricity and 100 million gallons of water. “We are currently weighing the options to select from two projects — one at Taweelah and other one at Shuwaihat, near the existing power plants,” he added. The power plant is planned for commercial generation by mid 2013.
The authority intends to issue tender for pre-qualification of the contractor for the electric power plant before summer.
Al Nuiami denied reports that international developers have not shown much interest in the project.
Earlier, Angus Hindley, MEED’s research editor, said that the UAE will invest an estimated $18 billion in its electricity and water industry by 2015 to generate 20,000 megawatts of electric power.
Dubai and Abu Dhabi will produce 8,000 megawatts of electricity each by 2015, while the rest will be generated in the other emirates.
He said that the growth in electricity demand in Dubai was 11 per cent in 2008, down from 15 per cent a year earlier.
The countries of Arabian Gulf region will invest $54 billion to generate 57,000 megawatt electricity by 2015, he added.
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