Taqa raises USD 1.75 bn as it works toward AED 75 bn in capex by 2030

Abu Dhabi National Energy Company (Taqa) raised USD 1.75 bn from its dual-tranche USD bond yesterday, and strong demand allowed it to price both tranches 32 bps tighter than initial guidance, Zawya reports. Final orders topped USD 5.7 bn, excluding joint lead manager interest. This is Taqa’s first trip to the debt market since L’imad subsidiary Abu Dhabi Power Corporation bought out its minority shareholders and delisted it from the ADX.

The green tranche took the bigger share: The USD 1.1 bn, five-year green note priced at a 5.875% coupon, 98 bps over US Treasuries, against initial price thoughts of around 130 bps. Orders exceeded USD 3.3 bn, about three times the issue size. The USD 650 mn, 10-year tranche priced at 6.125%, or 108 bps over Treasuries, compared with around 140 bps at launch. Its books passed USD 2.4 bn and peaked above USD 2.7 bn during marketing.

How it’s structured: The notes are issued under Taqa’s USD 20 bn medium-term note program and will be listed on the London Stock Exchange. Moody’s is expected to rate them Aa3 and Fitch AA-, in line with Taqa’s own ratings. They settle on 26 October and mature in April 2032 and October 2036.

Where the money goes: Proceeds from the green tranche will fund or refinance projects that qualify under Taqa’s green and blue finance framework, while proceeds from the 10-year tranche will go toward general corporate purposes.

Why it matters: At c. AED 6.4 bn, the raise covers less than a tenth of Taqa’s AED 75 bn capex plan through 2030. That plan breaks down into AED 40 bn for transmission and distribution and AED 35 bn for power generation and desalination. Taqa is also the first major non-bank UAE issuer in a recent wave of transactions that has so far been dominated by lenders, including Emirates Islamic, FAB, and Mashreq.

ADVISORS- ADCB, Citi, Emirates NBD Capital, FAB, HSBC, ICBC, JPMorgan, Standard Chartered, and our friends at Mashreq were joint bookrunners and joint lead managers. Citi, HSBC, and Standard Chartered structured the green tranche.