Dubai: The Dubai Electricity and Water Authority (Dewa) will tap into debt markets by 2013 raising Dh4 billion to upgrade its infrastructure and complete its current projects.
Speaking to Gulf News on the sidelines of the Arab Water and Power Forum, Saeed Al Tayer, Managing Director and CEO of Dewa said the authority is evaluating whether it may need to raise cash by selling sukuk, securitising assets, or borrowing from export credit agencies to pay for what it will owe next year and to complete its ongoing projects.
“Next year Dewa is intending to issue sukuk, securitisation and export credits worth Dh4 billion. The fund will go towards water and power projects,” he said.
“We will see what is the most competitive and what is the best rate that we are going to obtain, and we’ll decide based on that,” he said. “We are studying it, but everything will come next year.”
Dewa paid Dh1.2 billion of its loans in March ahead of schedule.
“Dewa has enough power reserves for the coming year. The continuing increase in demand for water and electricity is a clear indication that the economic, commercial and construction cycles in Dubai are in a good and prosperous position.”
“So far this year, we are expecting an average growth of 5 per cent by the end of 2013,” he said.
Dewa achieved an 18.4 per cent increase in installed power generation capacity and a 21.2 per cent increase in water desalination capacity in 2011.
He said Dubai is looking to achieve 30 per cent power savings by 2030 of 300MW of electricity in accordance with the Energy Integrated Strategy which was drafted to ensure efficient use of energy resources and secure a continuous supply while minimising the financial and environmental impact on the emirate.
While Dewa recently announced the shelving of its $1.3 billion (Dh4 billion) Hassyan independent power project, Al Tayer said Dubai has a power surplus and the project will be set back to a later date.
Dewa currently is boosts its power reserves by raising existing capacity and improving demand conservation, however, our main interest is coal-fired power plant.
Diversification
Dubai seeks to diversify sources of electricity and improve efficiency over the next two decades to ensure long-term energy supply.
Dewa has identified Jebel Ali as the best area to operate its new coal-fired power plant in Dubai.
Al Tayer said that following studies of coal-fired plants across the world, Dewa decided on the location of its new plant. He said the project would allow the private sector into the industry.
“In such a new project we will go for an independent power project (IPP) as we don’t have enough experience in such projects,” he said.
Al Tayer said the implementation of the project would be carried out in long-term phases.
“This study is a key step towards the implementation of the energy diversification strategy adopted by the Dubai Supreme Council of Energy, in which coal is set to become part of Dubai’s energy portfolio as 12 per cent of future energy should come from the coal-fired power plant. The strategy aims to diversify energy sources to ensure energy supply and meet the growing energy demands in Dubai.”
