Acwa Power, Fewa, MDC Power get financial closure on $800m plant
The 150migd Umm Al Quwain Independent Water Project (IWP) is the largest desalination project in Northern Emirates
A consortium comprising Saudi Arabia’s Acwa Power, UAE’s Federal Electricity and Water Authority (Fewa), and MDC Power Holding Company, which is fully owned by Abu Dhabi-based sovereign investor Mubadala Investment Company (Mubadala), has achieved financial closure for the 150migd Umm Al Quwain Independent Water Project (IWP) in the United Arab Emirates – the largest desalination project in Northern Emirates.
According to an Acwa Power statement, the $800m project, which is funded on a debt:equity ratio of up to 85:15, will receive the $680m senior debt from a syndicate of seven international and local lenders, including Korea Development Bank, MUFG Bank, Siemens Bank, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation, First Abu Dhabi Bank, and the Saudi American Bank. These entities have helped structure the first IWP non-recourse project finance debt for Fewa on a 24.5-year door-to-door tenor.
The Water Purchase Agreement (WPA) with Fewa has been inked for a 35-year term, and the reverse-osmosis technology-based plant is projected to be commercially operational by July 2022.
The plant along with the associated intake and outfall facilities will produce 682,000m3 per day of desalinated water and will be located at a coastal site in Umm Al Quwain along the border of of Ras Al Khaimah.
Commenting on the milestone, president and chief executive officer of Acwa Power, Paddy Padmanathan, said: “We are pleased to partner with Fewa and Mubadala on the first IWP infrastructure in Umm Al Quwain. Successfully achieving financial closure at this stage is testament to the readiness of the market for private-public partnerships.”
Padmanathan added: “This project is another example of our commitment to supply affordable potable water to more people by developing efficient water infrastructure that will cater for the growing demand in the country.”
Sharing his thoughts on the financial closure, chief investment officer, Rajit Nanda, said: “We are delighted to have shown Fewa that we are a partner of choice through the timely financial close of this project and our contribution to securing cost-effective and energy efficient potable water supply for the Northern Emirates.”
Nanda added: “This project is a strong indicator of how Acwa Power has developed a stronghold in the United Arab Emirates. We look forward to capitalising on this opportunity and supporting the envisioned growth for the country.”