Moody’s said: “DEWA continues to benefit from strong commercial and financial data, as well as from Dubai’s stable and supportive regulatory framework, enjoying a dominant market position in Dubai’s energy and water sectors, and a strong asset base with a reserve margin of 36% in 2020.”
The agency expected a recovery in the operational performance of the authority in 2021; As a result of the increased consumption of electricity and water, as well as the expiration of the comprehensive 10% discount on all electricity bills that lasted for 3 months in 2020.
Regarding the liquidity of the Dubai Electricity and Water Authority, the agency considered it “excellent”, with expectations of achieving about 11.3 billion dirhams in cash from operations over the next 12 months, in addition to 7.2 billion dirhams of cash and cash equivalents as of June 30, 2021, and an undrawn credit facility of 2 billion dirhams due in 2022, which will be sufficient to cover capital spending needs of about 13 billion dirhams, debt maturities of 3.2 billion dirhams, and joint dividends estimated at 1.5 billion dirhams.
The stable future outlook reflects Moody’s view that the credit position of Dubai Electricity and Water Authority is linked to the economic environment and the financial strength of the Emirate of Dubai.
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