A consortium led by Saudi Arabia’s Acwa Power has reached financial close for the planned $564mn 900MW fifth phase of the Mohammed bin Rashid al-Maktoum solar park in Dubai.
The financing for the $564mn project will be based on the principles of limited recourse project financing with senior debt provided by a group of international, regional and local banks. The deal includes a project recourse mezzanine tranche, which will be structured as a 27-year soft mini-perm financing with conventional and Islamic tranches.
The financing structure also contains a set of equity bridge loans provided by local banks and by state utilility and offtaker Dubai Electricity & Water Authority (Dewa). Dewa also has a 60 per cent stake in the special purpose vehicle (SPV) set up to develop and operate the solar plant, Shuaa Energy 3, with the remaining 40 per cent split between Acwa Power and its partner Gulf Investment Corporation (GIC) from Kuwait.
The financing group for the transaction includes:
• Abu Dhabi Islamic Bank
• Arab Petroleum Investment Corporation (Saudi Arabia)
• Industrial and Commercial Bank of China
• Emirates NBD Bank (local)
• Natixis (France)
• Samba (Saudi Arabia)
• Standard Chartered (UK)
• Warba Bank (Kuwait)
The local Commercial Bank International provided the project recourse mezzanine tranche, with equity bridge facilities provided by Commercial Bank of Dubai, Emirates NBD Bank and Mashreq Bank.
Dewa signed the power purchase agreement (PPA) with Saudi Arabia’s Acwa Power for the 900MW fifth phase project in April. The PPA was signed for a levelised cost of electricity (LCOE) tariff of $cents1.6953/kWh, one of the lowest PV solar tariffs in the world.
In July, Acwa Power appointed China’s Shanghai Electric as the engineering, procurement and construction (EPC) contractor for the project.
The MBR solar park is planned to have a total installed capacity of 5,000MW by 2030. The park currently has 1,013MW of PV solar capacity under operation, with 1,850MW of PV and concentrated solar power (CSP) capacity currently under construction.
