The AED 8.89bn ($2.42bn) refinancing of the Barakah NPP project in Abu Dhabi, announced in 2023, has been recognised as a Green Loan Facility. The Emirates Nuclear Energy Corporation (ENEC) said this “underscores nuclear energy’s major contribution to powering the UAE’s green economy and energy transition strategy through clean, carbon emissions-free electricity”.
Barakah is the first multi-unit operational NPP in the Arab world, with the operational teams starting up a unit every year since 2020. Construction of the Barakah NPP began in 2011. Korea Electric Power Company (Kepco) led the consortium that is building the plant comprising four APR1400 reactors. Unit 1 was connected to the grid in 2020, followed by unit 2 in 2021. Unit 1 began commercial operation in April 2021 and unit 2 in March 2022 and unit 3 was connected to the grid in October 2022. Unit 4 began operation earlier in March and the plant should be fully operational later in 2024.
The Barakah One Company PJSC – a joint-venture between ENEC and Kepco – completed refinancing of the project in July 2023. Barakah One refinanced the full outstanding balance using loan facilities extended by the Export-Import Bank of Korea (Kexim), the export credit agency of South Korea. Such facilities were originally committed in 2016 to support the construction and development of the Barakah plant. The Kexim facilities were refinanced through a competitive market process resulting in the selection of two leading UAE banks, First Abu Dhabi Bank (FAB) and Abu Dhabi Commercial Bank (ADCB).
ENEC said the role of the Barakah Plant in generating clean electricity has a cascading impact, unlocking ESG [Environmental, Social & Governance] funds for local Abu Dhabi companies through the Clean Energy Certificates programme, thereby enhancing their competitive advantage and ability to command a green premium for products and services.
The Barakah Plant project’s green loan status makes it the first in the MENA region and Asia, and the second nuclear project globally to successfully complete the evaluation process following the €1bn green loan awarded to EDF for the maintenance of its nuclear fleet in 2022. Previously, ESG-labelled nuclear sector finance deals have focused on Green Bonds, with the first of these issued to Canada’s Bruce Power in 2021.
ENEC Managing Director & CEO Mohamed Al Hammadi said recognition that Barakah refinancing meets Green Loan status requirements firmly establishes nuclear energy’s role in the clean energy transition. “We are breaking new ground as one of the first nuclear plants globally to be backed by green loan funding, as we sustainably power the UAE through constant and abundant clean electricity.”
He added: “Through Barakah, we are advancing the research and development for clean energy solutions such as clean molecules, clean hydrogen production and small modular reactors (SMRs), further highlighting the potential and broad range of applications of nuclear energy in decarbonising heavy and energy intensive industries. This will have long-term economic and social benefit for the nation as we enhance advanced industries, create thousands of jobs and develop a wider supply chain to ensure sustainable growth.”
The announcement was made following a ceremony at ENEC’s headquarters attended by Mohamed Al Hammadi; Nasser Al Nasseri, CEO of Barakah One; Abdulla Abdul Aziz, AlShamsi Group Chief Business Officer for ADCB; Ludovic Nobili, Head of Corporate & Investment Banking Group; Martin Tricaud Group Head of Investment Banking at FAB; and Abdulla Aljneibi, Global Head of Government, Sovereigns & Public Sector for FAB.
Barakah One’s Nasser Al Nasseri said the Barakah Plant project “demonstrates that nuclear energy is not only green, but is a proven, bankable technology”. The refinancing “demonstrates that banks and finance houses are seeing the benefit of nuclear energy as financially sound projects for financing, with a steady stream of revenue generated for decades, and sets the foundations for the financing of the many nuclear projects set to come online in the coming decades.”
ADCB’s Abdulla Abdul Aziz Al Shamsi said “the Green Loan classification of this Barakah loan facility is a key milestone for the UAE’s energy sector and reflects the increasingly important role of nuclear energy as a source of clean electricity”. As the UAE economy continues to grow, ADCB is committed to working with its customers across all sectors to help them succeed on their path to net zero. We are incredibly proud of our partnership with ENEC and look forward to further deepening our relationship in the years ahead.”
FAB’s Martin Tricaud said FAB is dedicated to playing a part to support the UAE’s commitment to Net Zero by 2050 through green-finance partnerships. “We recognise our responsibility to support our clients’ green projects on their path towards net zero and value this landmark opportunity to facilitate ENEC’s climate-action goals.”
As part of the next phase of the UAE Peaceful Nuclear Energy Programme, ENEC late last year launched ENEC ADVANCE, focused on the latest nuclear technologies to accelerate global decarbonization and the clean energy transition, while supporting and strengthening the UAE’s path to Net Zero. The programme will evaluate the latest technologies in the advanced SMRs and microreactor categories, which can generate clean molecules, such as hydrogen and ammonia.
Image courtesy of ENEC
