Financing for Phase 3 of MBR Solar Park finalised
The financing agreement that has been reached for Phase 3 of the MBR Solar Park makes it the largest renewable energy project in the Middle East to receive Sharia-compliant financing
Seven institutions have signed off on a financing agreement for the third phase of the Mohammed bin Rashid Al Maktoum (MBR) Solar Park in Dubai.
The signatories of the agreement include three from the Middle East, namely the Union National Bank, the Islamic Development Bank, and the Arab Petroleum Investments Corporation (APICORP), and four international financial institutions. They are Natixis, from France; Siemens Financial Services, from Germany; Korea Development Bank, from South Korea; and Canadian export credit agency, Export Development Canada.
According to UAE state news agency, WAM, the agreement makes Phase 3 of the solar park the largest renewable energy project in the Middle East to receive Sharia-compliant financing.
Saeed Mohammed Al Tayer, managing director and CEO of Dubai Electricity and Water Authority (DEWA), commented: “DEWA has adopted the independent power producer (IPP) model to build the 800MW third phase of the Mohammed bin Rashid Al Maktoum Solar Park.
“It has generated international interest from global business and energy companies, which reflects the trust and interest from international investors in large projects adopted by [the] Dubai government.”
Phase 3 of the solar park is being developed by a Masdar-led consortium, which includes EDF Group subsidiary, EDF Energies Nouvelles, in partnership with DEWA.
Mohamed Jameel Al Ramahi, CEO of Masdar, said: “The financing of the third phase of the Mohammed bin Rashid Al Maktoum Solar Park clearly demonstrates the confidence that the multinational lender community has in this important project, and underlines the compelling business case for renewable energy today.
“The involvement of Islamic investment in the project financing is especially pleasing, and will pave the way for further Sharia-compliant investment in the clean energy.”
Al Ramahi added: “Construction of the third phase of the solar park is progressing as scheduled thanks to the close involvement of DEWA and the collaborative efforts of all shareholders. This project is a model for successful public-private renewable energy partnerships, which not only contributes to the UAE's strategic objectives, but also sets an example globally.”
Meanwhile, Antoine Cahuzac, EDF Group's senior executive vice president for renewable energies and EDF Energies Nouvelles’ CEO, said: “The completion of this financing represents a major milestone in the implementation of the third phase of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai.
“The commitment from international financial institutions alongside Middle-Eastern financial institutions has been instrumental to the delivery of this important project, in partnership with Masdar and DEWA.”
Spanning 1,600ha, the PV plant will be the largest of its kind in the world upon completion, and is expected to generate around 2.5 million megawatt-hours of electricity per annum.
Unlike conventional solar power arrays, the third phase of the solar park will use tilting panels that track the sun, thereby maximising output, WAM reported.
The plant is being delivered in three stages. Considerable progress is reportedly being made on site, with drilling and piling works underway for the placement of PV panels. Completion of Stage A is due in 2018, the 300MW Stage B in 2019, and the final 300MW Stage C in 2020.