Risk management is a part of everything we do.
TAQA's strategy, policies and systems are all designed to identify, manage and monitor risks to the business, to its people and to the outside world. Risk management is an integral part of the management of the company. Responsibility for monitoring our internal control system and risk management procedures and guidelines lies with the Audit Committee of the Board.
Our financial strategy is focused on continuously improving our already healthy financial position. This includes:
- Maintaining strong liquidity: current balance of US$1.1 billion and US$3.2 billion of unused credit facilities (as of 31 December 2011)
- Proactively managing debt maturity; debt coverage (net debt/EBITDA) down from 7.2 in 2009 to 4.9 in 2011 (31 December 2011):
- Prudent review and management of interest rates, foreign exchange and commodity price volatility
- Commitment to transparency and best-in-class disclosure
- Fostering strong support from relationship banks
- Maintaining open communication with the investment community, rating agencies and regulators
Evidence of the success of our financial risk management strategy includes our strong credit ratings:
- Moody's (A3 (Stable))
- Standard and Poor's (A (Stable))
We invest heavily in forming long lasting relationships in each of our business areas – Oil & Gas, Power & Water and Energy Solutions – and our priority is to minimise risk through partnerships and long-term supply and off-take.
Most of our power & water generating assets operate under long-term PPAs (power purchase agreements) or PWPAs (Power & Water purchase agreements), defining all details of the contractual agreement between TAQA and the client. Such agreements include off-take arrangements whereby the client commits to pay for the capacity that has been made available. Off-takers are mostly governmental agencies.
Exposure to fuel price increases is reduced through contractual protection measures across most of our power & water assets. We have partnership arrangements with governmental agencies and international businesses around the world.
Risk management through HSSE
For details of our commitment to HSSE (health, safety, security and environment), see Safety and environment.