ACWA Power initiates financing for 900MW solar PV project

Financing for Shuaa Energy 3 PSC, which is the fifth phase of MBR Solar Park has been raised from nine finance lenders

Dewa has issued an RFQ for Phase 5 of Dubai's MBR Solar Park
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Dewa has issued an RFQ for Phase 5 of Dubai's MBR Solar Park

Saudi Arabian developer, investor and operator of power generation and desalinated water plants, ACWA Power 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 Solar Park (MBR Solar Park) in Dubai.

Shuaa Energy 3 PSC is the special purpose vehicle incorporated for the project, with 60% ownership by the Dubai Electricity & Water Authority (DEWA) and the balance split between ACWA Power and Gulf Investment Corporation (GIC).

The project involves the construction of a 900MW solar PV plant, using bi-facial panels with tracking technology at a capital cost of c. $564m, and has been the focus of international interest, having demonstrated one of the lowest levelised cost of electricity in the world.

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.

In addition, the financing structure featured a set of equity bridge loans provided by local banks and also by DEWA.

The financing group to the project included Abu Dhabi Islamic Bank, Arab Petroleum Investment Corporation, Industrial and Commercial Bank of China, Emirates NBD Bank, Natixis, SAMBA Financial Group, Standard Chartered Bank and Warba Bank. Additionally, a project recourse mezzanine tranche was provided by Commercial Bank International and equity bridge facilities provided by Commercial Bank of Dubai, Emirates NBD Bank and Mashreq bank.

Speaking about the development in the project, president and chief executive officer of ACWA Power, Paddy Padmanathan, said: "Securing this amount of long tenor project financing for Shuaa Energy 3 PSC even as the 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. 

The milestone 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."

Commenting on the financial scope and capabilities of the project, chief investment officer of ACWA Power, Rajit Nanda, said: "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.

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