Abu Dhabi nuclear project targeting debt commitments by summer 2011

14 April 2011

Debt-raising plans pushed back slightly due to Japan nuclear disaster

The Emirates Nuclear Energy Corporation (Enec) and team led by South Korea’s Kepco have pushed back plans to secure commercial debt for the region’s first nuclear power plant in Abu Dhabi.

According to sources close to the deal, the joint venture originally planned to seek debt commitments for the project early this year. However, Japan’s nuclear disaster has led many other countries to revise their own nuclear power plans.

Abu Dhabi remains committed to developing its nuclear project but the partnership will now aim to finalise agreements with lenders by the end of the summer.

The project will be financed in a similar project finance structure to the emirate’s previous independent power projects with the developer taking a stake in the project alongside Enec and several lenders.

Enec appointed Switzerland’s Credit Suisse as financial adviser focusing on planning and structuring the transaction in September 2010.

UK-based KPMG was appointed by Enec to act as financial adviser on the initial stages of the project. Standard Chartered is working for Korea Electric Power Corporation (Kepco). In July, Enec selected UK law firm Norton Rose as legal adviser for the power plant.

The scheme will comprise four nuclear reactors to be built at a site in the Abu Dhabi’s Western Region.

Enec filed applications in April to build the project at its preferred site at Baraka on the coast, near the Saudi Arabian border. The Federal Authority for Nuclear Regulation approved two permits relating to Enec’s proposed site for the project in July.  

The atomic energy body evaluated 10 sites across the UAE and then narrowed that group to a set of preferred and alternate sites, which were subject to further evaluation. The preferred site, including an area set aside for temporary construction space, covers approximately 13 square kilometres.

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