| ABU DHABI
ABU DHABI Oct 19 Abu Dhabi has sealed a $2.15
billion long-term financing deal for its Shuweihat 2 water and
power project, signalling the return of appetite for regional
project finance, officials and bankers said on Monday.
The 22-year financing for the project by Abu Dhabi Water &
Electricity Authority (ADWEA) from a consortium of 15 regional
and international banks is the biggest financing deal in the
region this year.
The Japan Bank for International Cooperation (JBIC)
committed half of the financing, while National Bank of Abu
Dhabi NBAD.AD is the only bank from the United Arab Emirates
that is part of the deal.
"Whilst major economies were going through a troubled
financial climate, ADWEA succeeded in achieving the largest
long-term financing contract in the region extending to 22 years
with several Asian, European regional and local financial
institutions," Sheikh Diab Bin Zayed Al Nahyan, chairman of
Adwea said in a statement to Reuters.
"The financial closure underlines the strength of Abu Dhabi
economy and reassures global economies' trust in the emirate."
Shuweihat 2, Abu Dhabi's eighth independent water and power
project (IWPP), is estimated to cost 10 billion dirhams ($2.72
billion). The funding is by a 79:21 debt-equity split.
The loan has been priced at 260 basis points (bps) over
Libor, rising to 350 bps at a later stage, bankers involved in
the deal said.
"It is the largest project financing deal in the region this
year and signifies a rejuvenation of appetite for regional
project financing," one of the bankers told Reuters.
"The project is risk-free and based on cash flow. It is
state sponsored. Such projects attract financing from lenders."
ADWEA owns 60 percent of the project while France's GDF Suez
GSZ.PA and Japan's Marubeni (8002.T) own 20 percent each. The
1507 megawatt natural gas-powered plant and 100 million gallons
a day desalination facility is due for completion in 2011.
JBIC has underwritten $1.2 billion. The other lenders
include France's Natixis, Calyon, BNP Paribas, Societe Generale;
Germany's Bayern LB and KFW, Japan's Bank of Tokyo-Mitsubishi,
Mizuho, SMBC and Sumitomo Trust, HSBC, Standard Chartered Bank,
National Bank of Abu Dhabi and Saudi Arabia's Samba.
Financing for the Shuweihat 2 project ran into trouble last
year following the global financial crisis with banks shying
away from lending. But the developers secured a $900 million
bridge facility from six banks that expired in September this
"This long-term loan will take care of the bridge
financing," said another banker.
HSBC acted as financial advisor on the project.
Abu Dhabi expects power demand to more than triple by 2020
and the government is considering nuclear power plants as a long
term option to meet demand.
In the short-term, power demand growth in Abu Dhabi was
expected to come in at around 17 to 20 percent per year due,
fuelled by increased industrial and commercial demand, ADWEA has
(Reporting by Stanley Carvalho, editing by Natsuko Waki)