UAE’s Barakah Nuclear Plant scores a new milestone with $2.42b refinancing recognised as Green Loan Facility

The AED 8.89 billion ($2.42 billion) refinancing of the Barakah Nuclear Energy Plant project, announced in 2023, has now been recognised as a Green Loan Facility. This important classification underscores nuclear energy’s major contribution to powering the UAE’s green economy and energy transition strategy through clean, carbon emissions-free electricity.

Through the Barakah Plant, the Emirates Nuclear Energy Corporation (ENEC) is spearheading the decarbonisation of the UAE’s energy intensive and heavy industries now to accelerate reaching the UAE’s goal of Net Zero by 2050. The Barakah plant, when fully operational, forecasted for later in 2024, will generate 40 terawatt-hours (TWh) of electricity per year while simultaneously preventing the release of 22.4 million tons of carbon emissions.

Second global nuclear project to get green loan status  

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 1 billion Euro 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.

This important classification highlights the growing global recognition that nuclear plants are clean sources of electricity, with great potential to expand into new areas such as clean hydrogen and ammonia generation. The fact that nuclear plants are a proven energy source, with many generating for at least 60 years, offers a stable finance proposition for banks. 

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 program, thereby enhancing their competitive advantage and ability to command a green premium for products and services.

Through three operating reactor units and the 4th nearing commercial operations, the Barakah Plant has already generated more than 60GWh of clean electricity, while preventing nearly 30,000 Kilotons of carbon emissions.

Supporting clean electricity

His Excellency Mohamed Al Hammadi, ENEC’s Managing Director and Chief Executive Officer, said in a statement: “The recognition of the Barakah refinancing as meeting 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… 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 refinancing was completed in July 2023 with of two leading UAE banks, Abu Dhabi Commercial Bank PJSC (ADCB) and First Abu Dhabi Bank PJSC (FAB) for the Barakah One Company, the financing and commercial subsidiary of ENEC. The existing loan facilities were refinanced through a competitive market process and converted into green loan financing in partnership with FAB as Senior Green Coordinator and ADCB as Green Loan Coordinator.