Barakah One has completed the refinancing of the full outstanding balance of the loans for the construction of a nuclear power plant in the United Arab Emirates.
The loan facilities from Export-Import Bank of Korea (Kexim), amounting to US$2.5 billion when they were signed in 2016, were refinanced through a competitive market process, resulting in the selection of Abu Dhabi Commercial Bank PJSC (ADCB) and First Abu Dhabi Bank (FAB).
Barakah One is a joint venture between Emirates Nuclear Energy Corporation (Enec, 82%) and Korea Electric Power Corporation (Kepco, 18%). A statement from the two companies says the refinancing reflects a natural progression in the development of the Barakah plant, as the project continues to progress through to full four-unit operations.
Commercial operations began at Unit 1 in April 2021, and the first three units of the project are now operational. The fourth unit recently started its operational readiness phase. Once commercially operational, Unit 4 will raise the Barakah plant’s total electricity generation capacity to 5.6 gigawatts, equivalent to 25% of the UAE’s electricity needs, delivering more than 40 terawatt-hours of clean electricity per year.
"We have showcased a new model to the world for nuclear developments, demonstrating that new nuclear projects like Barakah are bankable, can be delivered in a timely manner, while continuing to meet the highest standards of safety and quality," says Mohamed Ibrahim Al Hammadi, Enec managing director and chief executive officer. "We are proud to have two of the largest banks in the UAE providing the financing for our programme, further demonstrating the far-reaching benefits Barakah brings in stimulating sustainable economic growth.”
“We appreciate the role Kexim has played during the development phase of the Barakah plant, and as we now transition to full operations and move to the next phase, we are delighted by the confidence demonstrated from ADCB and FAB as we look ahead to the next 60 years of producing clean electricity for the UAE through the Barakah plant," adds Barakah One CEO Nasser Al Nasseri.
Clean electricity
The Barakah nuclear plant is a major contributor to the nation’s goal of achieving net zero by 2050, generating clean electricity around the clock while preventing millions of tonnes of greenhouse gas emissions.
Enec is focused on driving innovation in new technologies, including small modular reactors, clean molecules, synthetic fuels, and clean hydrogen, to support UAE’s clean energy transition.
Kepco is the prime contractor of the Barakah project, in cooperation with project owner Enec. The facility comprises four APR-1400 reactor units.
The contract for Barakah signed in 2009 was the first international project for the Korean nuclear power sector.
The APR-1400 technology was first used domestically for Shin-Kori Units 3 and 4, which were completed in December 2016 and August 2019 respectively.
In 2016, Enec (82%) and Kepco (18%) put in equity of US$4.7 billion, representing 20% of the total project cost. The Department of Finance of Abu Dhabi provided US$16.2 billion of debt, while Kexim came in with a US$2.5 billion direct loan. Kexim's financing had a 21-year tenor with an 18-year repayment period after construction completion.
A US$250 million commercial tranche was also provided by the National Bank of Abu Dhabi, First Gulf Bank, HSBC and Standard Chartered. HSBC acted as financial adviser. The commercial lenders benefited from a Department of Finance of Abu Dhabi guarantee.
