DUBAI - Dubai Electricity and Water Authority will tap 15 banks for a Dh8 billion ($2.2 billion) Islamic loan refinancing, which is scheduled to be announced on Thursday.
The due date for the repayment of this syndicated refinancing, called an ‘Ijara,’ or leasing facility, is April 13 and will be arranged by seven foreign banks and eight local banks. Dubai Islamic Bank will be the lead arranger, and some newly established Islamic banks are likely to take part in this financing, a person familiar with the deal told
The Dubai Electricity and Water Authority, or DEWA, is borrowing for a three-year period this time, compared with two years in 2007.
Saeed Mohammed Al Tayer, Managing Director and Chief Executive Officer of DEWA, described the outlines of the syndication on Monday, after signing a joint-venture deal with Ducab and the Abu Dhabi Water and Electricity Authority. “The refinancing is on track, and we will be able to pay ahead of time,” Al Tayer added. DEWA is the latest Dubai government-owned entity to tap the loan market in order to refinance its existing debt. In February, Borse Dubai, the state-owned holding company of NASDAQ Dubai, raised a $2.5 billion loan to refinance part of a $3.4 billion facility.
In all, Dubai’s government-owned borrowers have $11 billion of foreign loans coming due before the
end of next year.
They will need to make four large repayments over 2009-10 period. The first repayment — the DEWA loan — is to occur next month, according to investment bank EFG-Hermes. The remainder will come due between December 2009 and June 2010.
DEWA currently has a power output capacity of 6,676 megawatts and an average consumption during peak hours of 5,287 megawatts. It has a surplus capacity of 1,389 megawatts, which exceeds by 26 per cent the electricity that Dubai requires during peak usage.
Al Tayer said that electricity production capacity would reach 7,287 megawatts by the end of this year, up nine per cent from present levels.