Taqa secures Dh1.08bn in private bond placement for Moroccan unit

The issuance lowers funding costs and helps extend the company’s debt repayment profile

Taqa reinforced its position in the Moroccan energy market, where it generates electricity to meet more than 40% of the country’s electricity demand. Courtesy: Taqa

Abu Dhabi National Energy Company, also known as Taqa, completed a private placement of a bond worth Dh1.08 billion in the Moroccan energy sector.

The company’s subsidiary Taqa Morocco finalised a bond issuance to private investors, diversifying the funding base of a company that meets more than 40 per cent of the electricity demand of the North African state.

The bond placement was “substantially oversubscribed” by qualified investors allowing the firm to optimise its capital structure and create value for its shareholders, the company said.

The transaction reduced the cost of debt by over 20 per cent and extended the debt maturity date by 11 years to March 2038.

"Our bond placement in Morocco underscores the critical role that our generation business plays in our international growth strategy,” said Jasim Husain Thabet, group chief executive and managing director of Taqa.

"As a regionally leading, fully integrated utilities champion, Taqa remains a trusted utility partner in Morocco through a proven track record of meeting a significant portion of the country’s electricity demand,” he added.

The issuance follows an option to extend the power purchase agreement between Taqa Morocco and local offtaker Office National de l'Electricité et de l'Eau Potable for 17 years, particularly with respect to units 1-4 of the Jorf Lasfar Power Plant.

The 2,056 Megawatt power plant generates sufficient electricity to meet 40 per cent of the country’s demand and serves 18 million people annually. The power facility is one of the largest in the region.

Taqa finalised a deal with Abu Dhabi Power Corporation in July to create one of the largest utility companies in Europe, the Middle East and Africa with Dh200bn of assets.