Dubai’s DEWA Says No More Sukuk Issues Before 2015

Dubai Electricity and Water Authority (DEWA) is not expecting to issue more Islamic bonds before 2015 if electricity demand growth in the Gulf Arab emirate remains steady, its chief executive said on Wednesday.

“According to cash flow, there will be no additional sukuk or (conventional) bonds (in 2013). I do not think we are going to target sukuk next year, except if (electricity consumption) growth changes to 10 per cent or growth targets change,” Saeed Mohammed al-Tayer said.

“We have growth of four to five per cent and I do not think it is going to increase. We will wait to see if there is any change in whether we need any more liquidity. We have time until 2015 to think about it,” he told a news conference.

In February, DEWA returned to global debt markets after an absence of more than two years with a $1 billion Islamic bond, or sukuk, which drew very strong demand. That left it some $230 million short of its full-year borrowing target.

Asked how DEWA planned to finance the rest of its borrowing requirements this year, Tayer said: “The strategy consists of different tools, for example ECAs (export credit agencies), syndication…and also bonds. There are many options we have.”

DEWA’s head said in October that the emirate’s sole utility would look to raise around Dhs4.5 billion ($1.23 billion) of debt in 2013 through sukuk, export credit agency finance and securitisation deals.

As of the end of 2012, DEWA, a fully government-owned monopoly, had Dhs21.2 billion worth of outstanding borrowings with 4.2 billion of it in the form of short-term debt, its February sukuk prospectus showed.

Tayer also said DEWA was unlikely to build more generating capacity in the next few years on top of its current 9,740 megawatts.

“We have sufficient resources to cope with any future requirements for the next five years if we are able to maintain the (electricty consumption) growth of three to four per cent.”