Taweelah B project financing closure in prospect

24 January 2005 – The $2.5bn (Dh9bn) in financing required for Abu Dhabi’s $3bn Taweelah B IWPP project will be finalised by the second quarter, bankers said. “The total debt financing of $2.5bn includes senior debt of $2 billion and $500m in equity bridge financing.

We expect the financial close some time in the second quarter,” said Charlie Seymour, Director of Project and Export Finance (Power and Utilities) for HSBC. HSBC is the financial advisor for Taweelah B, Abu Dhabi’s fifth independent water and power project (IWPP).

The project was awarded to a consortium led by Japan’s Marubeni Corporation.

“There are already eight banks in the first stage of the transaction. We will have a general syndication, and expect some local and regional banks to participate in the transaction,” he told Gulf News.” The expected revenues from the existing assets total $500m. The Japan Bank for International Cooperation (JBIC) is providing $1.2bn in financing, out of the $2bn senior debt.

“For the JBIC, this is its biggest ever loan in terms of project financing for a single project. It will be a limited recourse project finance loan by JBIC and an international syndication of 15 commercial banks from eight countries,” said a JBIC official present at the signing of the key agreements on Monday. The lead arrangers for the project financing were BNP Paribas, ANZ Investment Bank and Kreditanstalt Fuer Wiederaufbau.

This could well be the biggest financing deal of this year for a single project in Abu Dhabi, sources said. “It is undoubtedly a very big financing deal, with the Japanese bank accounting for a large portion of the debt. We hope the financial close will take place on schedule,” said a banker involved in the deal. He declined to give details. The final structuring of the financing is being put in place.