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DEWA to Make Public $2.2 Billion Refinancing Deal Next Week

DUBAI - The Dubai Electricity and Water Authority (DEWA) will announce the details of a new $2.2 billion Islamic loan refinancing next week, a top official said on Sunday.

“It is under the process and we are planning to announce complete details of participating banks next week, which is ahead of time,” said Saeed Mohammed Al Tayer, Managing Director and Chief Exeucitve Officer of DEWA.

DEWA is in syndication with a new loan, which is being arranged by both Islamic and conventional banks. This time some new Islamic banks will take part in the syndication, a source in the banking sector told Khaleej Times.

The loan may have a minimum of three-year maturity period compared to two-year previously, the source informed.

DEWA is the latest Dubai government entity to tap the loan market in order to refinance existing debt.

In February, Borse Dubai raised a $2.5 billion loan to refinance part of a $3.4 billion facility. In all, Dubai Inc borrowers have $11 billion of foreign loans due to mature before the end of next year, according to Reuters data.

Last week, the UAE economy minister said the economy could shrink this year due to the global slowdown, as signs mount that the global financial crisis has hit Gulf oil producers harder than initially thought.

Al Tayer said that the Dubai utility has sufficient reserves to meet requirements of the Emirate.

The utility has deferred some of the expansion projects and will review these projects in September this year, according to Al Tayer.

DEWA said earlier this month that it would press ahead with a Dh72.5 billion investment programme to boost power and water output capacity.

Al Tayer said the utility company, which had already spent Dh15.5 billion for projects that had come on stream over the past two years, was on track to forge ahead with further investments of Dh57 billion on projects that were underway.

DEWA launched the five-year Dh72.5 billion capital spending plan in 2007 that envisaged massive output boost in power and water to feed the emirate’s growing demand. According to Al Tayer, work on major projects for production, transmission and distribution of electricity and water was progressing in line with Dubai’s Strategic Plan.

DEWA currently has a power output capacity of 6,676 megawattswhile the peak load is 5,287 megawatts and a surplus of 1389 MW, which exceeds 26 per cent of electricity required during peak demand.

abdulbasit@khaleejtimes.com