Abu Dhabi National Energy Company, Taqa, together with Emirates Water and Electricity Company, raised $700.8 million through its first green bond as it diversifies funding sources to include sustainable financing for projects.
Taqa will use proceeds of the deal to refinance existing debt of Sweihan PV Power Company, the entity set up to build, own and operate Noor Abu Dhabi solar power project, it said on Monday.
Maturing in 2049, the bonds offer a 3.625 per cent coupon and are expected to receive BBB+/Baa1 ratings from S&P and Moody’s, respectively. The deal was 1.8 times oversubscribed with local, regional and international investors placing total orders of $1.26bn, the company said.
“Taqa continues to deliver benchmark renewable energy projects with our investments underpinned by our strong balance sheet and our commitment to delivering shareholder value,” said Jasim Husain Thabet, Taqa group chief executive.
“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.”
"Over the next 10 years, Taqa will continue to deliver on its objectives for sustainable growth and returns, with commitment to environment, social and governance standards as it seeks to become the “recognised low-carbon power and water champion of Abu Dhabi”, Mr Thabet added.
A syndicate of joint lead managers and bookrunners including Citi, HSBC, MUFG, BNP Paribas, First Abu Dhabi Bank and SMBC Nikko arranged the transaction. White & Case were legal advisers, while Alderbrook Finance was financial adviser for SPPC.
Noor Abu Dhabi is the world’s largest single-site solar photovoltaic plant, which recently completed three years of commercial operations. The plant has 1.2 gigawatts of direct current power generation capacity and supplies more than 90,000 households with clean solar power in Abu Dhabi. The scheme is offsetting one million metric tonnes of emissions annually.
The project is 60 per cent owned by Taqa with the remaining owned by Marubeni Corporation and JinkoSolar.
“Noor Abu Dhabi has helped set the benchmark for the UAE’s ambitions to build a green economy,” Abdulla Al Kayoumi, chief executive of SPPC, said.
“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.”
In May, Taqa, one of the largest listed integrated utility companies in the Europe, Middle East and Africa region, raised $1.5bn through a dual-tranche bond to fund its low-carbon growth plans and buy back some of its outstanding corporate bonds. The company is rated Aa3 by Moody’s Investors Service and AA- by Fitch.
Last April, Taqa announced its 2030 strategy that involves investing $10.9bn in infrastructure development as it looks to add about 27 gigawatts of power capacity and expand its renewables portfolio.
The company plans to expand its power-generation capacity in the UAE from 18 gigawatts to 30 gigawatts and boost its global generating capacity by 15 gigawatts.
In addition to Noor Abu Dhabi, Taqa also has Al Dhafra Solar PV Plant under construction, which will overtake Noor Abu Dhabi to become the world’s largest single site solar PV plant, once completed.
The project received one of the most competitive tariffs for solar set at $1.32 cents per kilowatt hour 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 four million bifacial solar panels.