Abu Dhabi Government reaffirms sovereign support for its state-owned enterprises

The government of Abu Dhabi has noted the recent action taken by Moody’s Investors Service to downgrade the ratings of several Abu Dhabi’s government-related issuers. Commenting on the move the Undersecretary of Abu Dhabi’s Department of Finance,  H.E. Hamad al Hurr Al- Suwaidi said, “We obviously disagree with the reasoning involved in a number of Moody’s decisions, especially those concerning TDIC, Mubadala, and IPIC “.

He asserted that there has been absolutely no change in any aspect of government support for those three companies. His Excellency also reiterated that the government continues to support Taqa. “Taqa is majority-owned by the government, provides almost all of Abu Dhabi’s water and electricity supply, and plays an important role in the Emirate’s energy policy.”

“The three companies TDIC, Mubadala, and IPIC are 100% government-owned and they each play a crucial role in the government’s strategy for diversifying the economy. They are irreplaceable.” His Excellency said.

He continued, “The Government controls the activities of these companies through the Board of Director’s appointed by the government, each of which includes key members of Abu Dhabi’s Executive Council – our cabinet. Therefore, in our view, it is impossible to differentiate between the government and any of these three entities in terms of credit risk”.

In his concluding statement, the Undersecretary said, “Not only does the government back these entities, as Moody’s correctly pointed out, fully and unconditionally, we have a strong fiscal position and reserves that give us all the capacity we need to meet our commitments to these companies from our own resources. “