No plan to issue bonds 'DEWA'

DUBAI: State-owned utility Dubai Electricity and Water Authority (DEWA) can pursue its ambitious investment plans without a further bond issue in the short term, its CEO Saeed Mohamed al-Tayer said on Wednesday.

"For the time being, there is no plan to issue new bonds," Tayer told reporters, though he said DEWA is aiming to double the capacity of a planned clean-coal project to 3,000 megawatts.

The monopoly state utility received a "BBB minus" rating with a stable outlook from Standard & Poor's earlier this week, the lowest investment grade rating on the agency's scale.

The utility tapped global debt markets twice in 2010 in heavily oversubscribed bond sales. There was growing speculation it would seek to benefit from the rating, as well as from narrowing spreads and strong global appetite.

Dubai's government and flagship carrier Emirates have both issued bonds in the last month, taking advantage of returning confidence in the United Arab Emirates seen as a relatively safe haven bet given unrest elsewhere in the Middle East.

DEWA has sole responsibility for transmission and distribution of power and water supply in Dubai, the UAE's trade and business hub, whose property-focused economy is recovering from last year's $25 billion debt restructuring.

Tayer also said the Gulf emirate would have enough power and desalinated water in the medium term.

"I can assure that there will be no shortage of electricity in Dubai for the next five years," he said.

He said in March the company planned annual capital expenditure of around $1 billion over the next three years and expected Dubai's energy use to increase by between 6 and 7 percent in 2011.

Copyright Reuters, 2011