Home Dubai News Dubai Electricity is debt-free after $1.5bn bond repayment

Dubai Electricity is debt-free after $1.5bn bond repayment

CEO says new projects worth over $22bn are ongoing or due to complete in the next five years

Dubai Electricity and Water Authority (DEWA) has become debt-free after the state-owned utility repaid a $1.5 billion bond this month.

“New projects worth over AED80 billion ($22bn) are either ongoing or envisaged for completion in the next five years,” chief executive officer Saeed Al Tayer said in a statement. “DEWA is not necessarily counting on new borrowings for that, rather we will use internal resources and leverage public private partnerships.”

DEWA commissions eight substations worth $231m

Authority also testing 12 new 132/11 kV substations to be operational in Q2 2020

Other borrowings linked to the utility comprise unused credit-lines, according to data compiled by Bloomberg. Joint-venture companies building DEWA power plants in the Arabian Gulf emirate have taken on some project-level loans.

The pandemic crushed economic activity worldwide as businesses shuttered and workers stayed home. That’s cut energy demand, including for utilities such as DEWA.

Moody’s Investors Service in April lowered the company’s debt rating to Baa2, two levels above junk. It said departures of foreign residents may reduce demand for power and that Dubai’s government may rely more heavily on transfers of funds from the firm as the economy stutters.

Dubai Electricity is debt-free after $1.5bn bond repayment

DEWA is developing renewable energy alongside its traditional natural gas-fired power plants. It’s building a desert solar park with capacity planned to reach 5,000 megawatts by 2030. Just over 1,000 megawatts of solar capacity is in operation now, with another 1,850 megawatts under construction. A 900-megawatt section of the energy park is set to start in the third quarter of 2021.

DEWA is also building a coal-fired power plant along Dubai’s border with Abu Dhabi, the capital of the United Arab Emirates. The plan is for that to be able to produce as much as 2,400 megawatts.

Dubai Electricity is debt-free after $1.5bn bond repayment

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Dubai Electricity is debt-free after $1.5bn bond repayment
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