Abu Dhabi National Energy Company (TAQA), along with Emirates Water and Electricity Company (EWEC), has successfully priced green senior secured bonds for an aggregate principal amount of $700.8 million by Sweihan PV Power Company (SPPC).
According to a report, the bonds, one of TAQA’s first forays into green financing, will be used to repay SPPC’s existing debt facilities arranged in 2017 for the construction, operation and maintenance of Noor Abu Dhabi, the world’s largest single-site solar project currently in operation.
The bonds issued at a 3.625 percent coupon rate which will mature on January 31st, 2049, are expected to receive BBB+/Baa1 ratings from S&P and Moody’s respectively and were 1.8 times oversubscribed with local, regional and international investors placing total orders of $1.26 billion.
This transaction provides significant value for the shareholders of SPPC and EWEC as procurers through a five-year loan maturity extension backed by a five-year Power Purchase Agreement (PPA) extension to 2049, which was secured with the support of the Abu Dhabi government.
SPPC’s bonds were approved under the International Capital Markets Association standards following the presentation of its Green Bond Framework, confirming that the project complies with the Green Bond Principles.
“Noor Abu Dhabi has helped set the benchmark for the UAE’s ambitions to build a green economy. Issuing the first long-term green bond in Abu Dhabi to refinance the project speaks to our ability to deliver renewable energy competitively and reliably and is a testament to our commitment to the economic growth and sustainable development of Abu Dhabi.“
The bonds were arranged and offered through a syndicate of joint lead managers and bookrunners, advised by Norton Rose Fulbright LLP (legal), comprising of Citi, HSBC, MUFG, BNP Paribas, First Abu Dhabi Bank (FAB) and SMBC Nikko. SPPC was advised by White & Case LLP (legal) and Alderbrook Finance (financial).
TAQA owns 60 percent of Noor Abu Dhabi, with Marubeni Corporation and JinkoSolar owning the remaining 40 percent. In addition to Noor Abu Dhabi, TAQA also has Al Dhafra Solar PV Plant under construction, which once completed, will overtake Noor Abu Dhabi to become the world’s largest single site solar PV plant.
This project has already broken records with the most cost competitive tariffs for solar set at $1.32 cents/kWh at the time of financial close. At nearly double the size of Noor Abu Dhabi, it will provide enough power for more than 160,000 households and will have more than 4 million bifacial solar panels.
Mr. Jasim Husain Thabet, TAQA Group CEO and Managing Director, said that “TAQA continues to deliver benchmark renewable energy projects with our investments underpinned by our strong balance sheet and our commitment to delivering shareholder value. This bond attracted interest from international and Environmental, Social, and Governance (ESG)-focused investors, further solidifying the confidence in TAQA based on our strong track record.“
Mr. Othman Al Ali, CEO of EWEC, commented that “The green bond issuance for Noor Abu Dhabi is a ground-breaking initiative, demonstrating our commitment to applying innovative, sustainable energy and water production solutions.”