Abu Dhabi National Energy Company, also known as Taqa, has reached financial close for a 2.4 gigawatt gas-fired power plant in the emirate of Fujairah – the largest such scheme in the UAE.
The Fujairah F3 independent power producer (IPP) project, expected to cost Dh4.2 billion, is set to power 380,000 households upon completion in the third quarter of 2022. An IPP refers to a private entity that generates power for sale to a utility or end users.
The financial close follows the completion of power purchase and shareholders’ agreements between Abu Dhabi Power Corporation (ADPower), Emirates Water and Electricity Company (EWEC), Mubadala Investment Company and Japan-based Marubeni Corporation.
Taqa and Mubadala will hold a joint 60 per cent stake in the project, with the remainder held by Marubeni.
The funding for the project will be sourced from a consortium of banks including Japan Bank for International Cooperation, BNP Paribas Fortis SA/NV, Mizuho Bank, Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, and Standard Chartered Bank.
The power project in Fujairah “is a landmark for Taqa and its generation assets", Taqa’s new chief executive Farid Al Awlaqi said.
"It will be the largest gas-fired power plant in the UAE, and by utilising advanced combined cycle technologies, it will be one of the most efficient in the region,” Mr Al Awlaqi said.
The financial close "accelerates the transformation of the power and water sector”, he added.
The Fujairah F3 plant will be located in the emirate’s Qidfa area between the existing Fujairah F1 and F2 power plants.
Earlier this month, Taqa completed its transaction with ADPower to create one of the largest utility companies in the Europe, Middle East and Africa region with total assets worth about Dh200bn.
As per the terms, ADPower transferred the majority of its water and electricity generation, transmission and distribution companies to Taqa in return for convertible shares in the latter.
Following the deal, Moody's upgraded Taqa's issuer rating to Aa3 from A3 and its short term rating to P-1 from P-2. The ratings agency said that the new assets have a "significant positive impact on Taqa's business and financial profiles".
Taqa is also intending "to seek an increase to the free float through a follow-on public offering".
