Abu Dhabi: Abu Dhabi’s state utilities and their partners in a power plant in the emirate will sell about $800 million (Dh2.94 billion) in bonds to refinance the facility in the next quarter, two bankers with knowledge of the matter said.
Abu Dhabi National Energy Co. (Taqa) and its partners in the Shuweihat S2 plant are planning to raise cash through a project bond in October, the bankers said, asking not to be identified because the information is confidential. The cash will be used to refinance existing bank loans, and revenue from the plant will provide money to repay the bond, the bankers said. Taqa declined to comment.
Taqa and partners including GDF Suez SA and Marubeni Corp will refinance construction loans that were arranged in 2009 during the global financial crisis when borrowing rates were higher than today, the bankers said. Shuweihat S2, a natural-gas-fired facility capable of generating 1,510 megawatts of power and desalinating water, began operating in the second quarter of 2011.
Abu Dhabi is expanding its power-generation network to meet demand from a growing population and energy-intensive industries such as production of metals and petrochemicals.
Shuweihat’s owners wanted to sell the bond as early as September, MEED magazine reported earlier this month. The plant’s shareholders were still in talks with lenders about the refinancing terms, meaning the transaction would probably close in the fourth quarter, the bankers told Bloomberg. Taqa and its partners were also still discussing the size of the bond, the bankers said.
The partners obtained $2.7 billion in funding for Shuweihat in October 2009. The money included a $1.1 billion loan from Japan Bank for International Cooperation and borrowings from BNP Paribas SA, HSBC Holdings Plc, Societe Generale SA, Standard Chartered Plc and other lenders.
Abu Dhabi controls the plant through Taqa’s 54 per cent stake and a 6 per cent share held by the Abu Dhabi Water & Electricity Authority, or Adwea. GDF Suez owns 20 per cent of Shuweihat, and Marubeni and Osaka Gas Co. each have a 10 per cent stake. The Shuweihat plant is about 250 kilometres southwest of the capital.
Adwea had no immediate comment on the planned bond sale. Marubeni and Osaka Gas declined to comment, and a GDF Suez official didn’t immediately respond to an e-mailed request for information.
