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 Solar Park in Dubai. Shuaa Energy 3 PSC is the special purpose vehicle incorporated for the project, with 60 percent ownership of the Dubai Electricity and Water Authority (DEWA) and the balance split between ACWA Power and Gulf Investment Corporation.
The project involves the construction of a state-of-the-art 900MW solar PV plant, using bi-facial panels with tracking technology at a capital cost of $564 million. The solar park has been the focus of significant international interest, having demonstrated one of the lowest levelized costs of electricity in the world at $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 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.
The financing group for 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 Mashreqbank.
Paddy Padmanathan, president and CEO of ACWA Power, 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. 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.”
Rajit Nanda, chief investment officer of ACWA Power, added: “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 program, 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.