Financing completed for $564m fifth phase of MBR Solar Park
ACWA Power, a Saudi Arabian developer, investor and operator of power generation and desalinated water plants, completed the signing of all financing agreements of the 900MW solar PV project, Shuaa Energy 3 PSC, which is the fifth phase of the Mohammed Bin Rashid Al Maktoum (MBR) Solar Park in Dubai.
Shuaa Energy 3 PSC is the special purpose vehicle incorporated for the project, with 60 per cent ownership by the Dubai Electricity and Water Authority, Dewa, and the balance split between ACWA Power and Gulf Investment Corporation, GIC, an ACWA Power press release said on Thursday.
The project involves the construction of a 900MW solar PV plant, using bi-facial panels with tracking technology at a capital cost of $564 million, and has been the focus of significant international interest, having demonstrated one of the lowest levelised cost of electricity in the world of USD cents 1.6953 per kWh.
The financing for the project is based on the principles of limited recourse project financing with the senior debt provided by a number of international, regional and local banks along with a project recourse mezzanine tranche committed by a regional bank, structured as a c. 27-year soft mini perm financing with both conventional and Islamic tranches. In addition, the financing structure featured a set of equity bridge loans provided by local banks and also by DEWA.
Commenting on the announcement, Paddy Padmanathan, President and CEO of ACWA Power, said, “Securing this amount of long tenor project financing for Shuaa Energy 3 PSC even as COVID 19 pandemic continues to cause social and economic disruption to the entire world illustrates the combined capabilities and trusted partnership between ACWA Power and Dewa. We are delighted to have achieved this significant milestone, which reflects confidence of the financial community in this partnership, and the role and iconic status of the fifth phase of Mohammed Bin Rashid Al Maktoum Solar Park in delivering Dubai’s Clean Energy Strategy 2050.”
In turn, Rajit Nanda, Chief Investment Officer of ACWA Power, commented, “Project financing of this magnitude having been successfully raised from nine project finance lenders in the midst of a global pandemic, is the ultimate testament to DEWA’s credibility as a counterparty and the success of their IPP programme, as well as ACWA Power’s focus and proven ability to deliver power and desalinated water reliably and responsibly at low cost.”
The EPC agreement for the construction of the project was signed with Shanghai Electric in July 2020.
Earlier the Shanghai Electric Group said they are working with ACWA Power of Saudi Arabia, responsible for the engineering, procurement and construction (EPC) for the project. They are working on delivering the fifth phase project of the Mohammed Bin Rashid Al Maktoum Solar Park in Dubai, with a capacity of 900MW.
The Solar Park project is the largest single-site solar power plant in the Middle East and comprises both photovoltaic and concentrated solar power technologies. It will have an installed capacity of around 5GW once complete.
The companies are cooperating on a 700MW concentrated solar power (CSP) project and the 250MW PV solar power project. These elements make up the fourth phase of the solar park.
The Mohammed Bin Rashid Al Maktoum Solar Park will be a key pillar in fulfilling the Dubai Clean Energy Strategy 2050 to increase the share of clean energy in Dubai’s total power output to 75 per cent by 2050.
The project is financed through a Public-Private Partnership (PPP) model.
Zheng Jianhua, Chairman of Shanghai Electric Group, and Muhammed Abunayyan, Chairman of ACWA Power, signed a cooperative agreement at an online signing ceremony on July 28.
Speaking at the ceremony, Zheng said that the contract signing of 900MW Solar Park project is another milestone along the journey of the pair’s cooperation. The companies have been working together since 2008.
“As we move swiftly forward with implementation, the signing of the EPC contract between ACWA Power and Shanghai Electric for the fifth phase of the Solar Park project represents a crucial milestone of the cooperation between the two companies,” said Abunayyan.
ACWA Power is a developer, investor and operator of power generation and desalinated water production plants. Registered and established in 2004 in Riyadh, Saudi Arabia.
ACWA Power employs over 3,500 people and is currently present in 12 countries in the Middle East, Africa, Central Asia and Southeast Asia.
Source : gulftoday
