Abu Dhabi nuclear project reaches financial close

20 October 2016

South Korea lends $2.5bn for Barakah nuclear scheme

Abu Dhabi-based Emirates Nuclear Energy Corporation (Enec) and Korea Electric Power Corporation (Kepco) reached a financial close on $24.4bn a project finance deal on 20 October.

Kepco has taken an 18 per cent stake in a new joint venture, Barakah One. Enec and Kepco provided $4.7bn of equity.

MEED reported in September that Enec had revived the project finance deal negotiated in 2012 for the Barakah nuclear power plant.

The direct loan agreements are:

  • · $2.5bn from the Export-Import Bank of Korea (Kexim)
  • · $250m commercial loan from the National Bank of Abu Dhabi, local First Gulf Bank, the UK’s HSBC and Standard Chartered
  • · $16.2bn from the Department of Finance of Abu Dhabi

This will cover the cost of the main contract for the construction and commissioning of the 5600MW Barakah plant, interest during construction and the cost of initial nuclear fuel. It also provides for increases in commodity costs during construction.

The hybrid project finance structure was arranged in 2012, as construction was beginning on the nuclear plant, then shelved in 2013.

The original 23-year $20bn loan included $10bn from the Export-Import Bank of Korea (Kexim), about $2bn from the Export-Import Bank of the US (US Exim), $6bn in direct funding from the government of Abu Dhabi, and just over $2bn from commercial banks. The loan size was reduced by a quarter in 2013 due to the size of interest payments.

The Barakah facility will have four 1,400MW reactors. It is scheduled for completion in 2020. Unit 3 steam generators were installed in August 2016.

Korea Electric Power Corporation (Kepco) won the contract to develop the plant in 2009. The engineering procurement and construction (EPC) contracts for each reactor were awarded to four companies: South Korea’s Hyundai Engineering & Construction, Samsung C&T, Doosan Heavy Industries & Construction and the US’ Westinghouse.

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