The Barakah One Company PJSC - a joint-venture between the Emirates Nuclear Energy Corporation (ENEC) and Korea Electric Power Corporation (KEPCO) - successfully completed the refinancing of the project in July 2023. Barakah One refinanced the full outstanding balance under the 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 in connection with the construction and development of the Barakah plant. The KEXIM loan 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).
An independent, globally recognised Second Party Opinion provider has now confirmed that Barakah's refinancing is aligned with Green Loan principles by assessing three core elements. These include Barakah's sustainability credentials, its positive contribution to the United Nations Sustainable Development Goals, and the credit facility's alignment with Barakah's overall environmental, social, and governance (ESG) profile.
The refinancing being recognised as a Green Loan Facility "underscores nuclear energy's major contribution to powering the UAE's green economy and energy transition strategy through clean, carbon emissions-free electricity", ENEC said.
"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 EUR1 billion (USD1.1 billion) green loan awarded to EDF for the maintenance of its nuclear fleet in 2022," it noted. "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."
Once the last of the four units at Barakah are in full operation - expected later this year - the plant will generate 40 TWh of electricity per year while simultaneously preventing the release of 22.4 million tonnes of carbon emissions.
ENEC said the role of the Barakah plant in generating clean electricity has a cascading impact, unlocking ESG 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 recognition of the Barakah refinancing as meeting Green Loan status requirements firmly establishes nuclear energy’s role in the clean energy transition," ENEC Managing Director and CEO Mohamed Al Hammadi said. "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.
"Through Barakah, we are advancing the research and development for clean energy solutions such as clean molecules, clean hydrogen production and small modular reactors, further highlighting the potential and broad range of applications of nuclear energy in decarbonising heavy and energy intensive industries."
Barakah One CEO Nasser Al Nasseri added: "Barakah One Company has continuously strived to use innovative and collaborative routes to financing the Barakah project, back from the start of the programme, through the joint venture created in 2016 and onwards to today, where we have four units operating and close to full fleet commercial operations.
"The Barakah plant project demonstrates that nuclear energy is not only green, but is a proven, bankable technology. Today's announcement 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."
The UAE embarked on its plan to implement a nuclear energy programme in 2008 when its government made the decision to build and operate a nuclear power plant to provide 25% of the country's electricity needs, diversifying its energy sources and supporting its long-term energy vision and net-zero goals.
Construction of the four Korean-designed APR-1400 units at Barakah, in the Al Dhafra region of Abu Dhabi, began in 2012, under a USD20 billion order signed in December 2009. Unit 1 began commercial operation in April 2021, unit 2 in March 2022 and unit 3 in February 2023. Unit 4 achieved first criticality on 1 March and is soon expected to be connected to the grid.
