The financial service S&P has issued a preliminary ‘A-‘ long term rating with a stable outlook on the proposed senior secured US$400 million bond being proposed by the Emirates Sembcorp Water and Power Co, ESC, it has been announced.

The proposed bond will partially repay US$178 million of existing debt and US$120 million of shareholder loan advances, as well as to fund a six-month debt service reserve account and transaction costs, S&P said.

ESC was established to run the Fujairah 1 Independent Water and Power plant at Qidfa, in Fujairah, one of the largest operating hybrid desalination plants in the world. The plant’s first phase was commissioned in 2004 and it was privatised in 2006. The company is now 60 percent owned by the Union Power Holding Company, a unit of the Abu Dhabi Water and Electricity Authority, ADWEA, and 40 percent by the Sembcorp Gulf Holding Company (Singapore), a unit of Singapore’s Sembcorp Industries. The project is supported by a long-term, availability-based power and water purchase agreement with Abu Dhabi Water and Electricity Co. which lasts until December, 2035.