The Emirates Nuclear Energy Corporation (ENEC) and the Korea Electric Power Corporation (KEPCO) announced today the formal financial close for the financing of the Barakah Nuclear Energy Plant project. The fund will be managed by the recently created subsidiary, Barakah One PJSC (Barakah One), of which KEPCO owns an 18 percent stake.
The total amount of financing to be managed by Barakah One is estimated at US$ 24.4 billion, composed of direct loan agreements of about US$ 19.6 billion as well as a total of US$ 4.7 billion in equity commitments. The equity commitments are provided by ENEC and KEPCO as part of the recently announced Joint Venture Agreement.
The direct loan agreements that Barakah One has entered into are:
- Direct loan of the Export-Import Bank of Korea (KEXIM) of US$ 2.5 billion
- A total of US$ 250 million of loan agreements with local and international commercial banks. These are: National Bank of Abu Dhabi, First Gulf Bank, HSBC and Standard Chartered.
- Direct loan from the Department of Finance of Abu Dhabi of up to US$ 16.2 billion
The direct loan agreements include the overnight cost of the Prime Contract for the construction and commissioning of the Barakah Nuclear Energy Plant, interest during construction and the cost of initial nuclear fuel. They also include allowances for potential inflationary increases in the price of commodities, such as construction materials, during the period of construction.
“With the creation of this financial framework, ENEC will be able to provide safe, reliable electricity to the UAE grid through a commercially viable and cost-competitive program.” Said H.E. Khaldoon Khalifa Al Mubarak, Chairman of the Board of Directors of ENEC. “This financial structure reflects the world-class quality of the program, and its credibility in the international community.
“The project is an investment in the nation’s energy future as well as an engine of growth for the UAE economy, already generating hundreds of jobs for talented UAE nationals through the creation of parallel industries that will participate in the nuclear energy sector,” H.E. Khaldoon Al Mubarak added.
“From the beginning, the peaceful nuclear energy program in the UAE has had the full support of the Abu Dhabi Government. Now, the Department of Finance, is honored and proud to be a direct supporter of the project which will bring clean and reliable nuclear energy to the UAE grid and promote the economic growth of our country and the development of our society for decades to come,” said H.E. Riyad Al Mubarak, Chairman of the Abu Dhabi Department of Finance.
“The government of the Republic of Korea is pleased to be the long-term strategic partner for the UAE Peaceful Nuclear Energy Program. We will continue to support KEPCO in its international projects and it is our priority to ensure the success of the Barakah Nuclear Energy Plant. We are proud to be a supporter of this world-leading safe, reliable and cost-efficient peaceful nuclear project,” said Mr. Joo Hyunghwan, Minister of Trade, Industry and Energy of the Republic of Korea.
“We believe that providing funding for Barakah One through a direct loan will further enhance the level of partnership between Korea and the United Arab Emirates. We are pleased to be contributing to the UAE’s peaceful nuclear energy program and look forward to supporting the project at Barakah. Our experience with major projects around the world provides us with unique insight and capabilities, all of which will be employed to ensure the success of the Barakah Nuclear Energy Plant,” said Lee Duk-Hoon Chairman and President of KEXIM.
The Prime Contractor for the Barakah Nuclear Energy Plant, KEPCO has been working together with ENEC since 2009 to deliver safe, clean, efficient and reliable nuclear energy to the UAE grid. ENEC and KEPCO recently entered into a Joint Venture Agreement to establish a new, long-term partnership to complete the construction and commissioning of the Barakah project and ensure the reliability, sustainability and commercial viability of the UAE Peaceful Nuclear Energy Program.
The Barakah Nuclear Energy Plant is scheduled for completion in 2020, with construction having started in 2012. With four reactors online, the facility will deliver up to a quarter of the UAE’s electricity needs and save up to 12 million tons in carbon emissions every year.
The project at Barakah is progressing steadily. Overall, construction of Units 1 to 4 is now over 71 percent complete. All four units will deliver safe, clean, reliable and efficient nuclear energy to the UAE grid, pending regulatory reviews and licensing.