Abu Dhabi revives Barakah finance deal

29 September 2016

Loan for nuclear power plant goes ahead after three years

Abu Dhabi-based Emirates Nuclear Energy Corporation (Enec) has revived a financing deal for its $30bn Barakah plant.

The loan, which is thought to be worth about $15bn, should be signed shortly.

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

MEED reported in 2012 that the UK’s HSBC and Standard Chartered, and the local National Bank of Abu Dhabi, Union National Bank and FGB would extend the commercial bank tranche.

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 that is expected to be funded through government bond issues, and just over $2bn from commercial banks.

The size was reduced by a quarter in 2013 due to the cost of interest payments, but never went ahead.

At the time, oil prices were more than $100 a barrel. In 2016, with oil prices below $50, the UAE is expected to run a $35.1bn deficit, or 10.8 per cent of GDP, according to the Washington-based IMF.

”It is Enec’s policy that we do not discuss financial information about the Barakah project,” stated Enec in response to a request for comment. "Enec is progressing steadily on project financing and current construction activity is being funded by Enec.”

The Barakah facility will have four 1,400MW reactors, to reach a capacity of 5600MW. 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.

“All four units at Barakah are some 70 per cent complete, an amazing achievement, considering we started construction a mere four years ago,” Enec CEO Mohamed al-Hammadi said earlier in September.

Enec signed an operating support services agreement (OSSA) with Korea Hydro & Nuclear Power (KHNP) in July 2016. KHNP will provide experienced personnel to Enec’s operating subsidiary Nawah. 

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