Utilities authority raised $650m through debt, while remaining $222m was raised in equity
Abu Dhabi Water & Electricity Authority (ADWEA) has closed a $872 million financing package for what is intended to be the world’s largest solar power plant, Saif Saleh al-Sayari, director general of the authority has said.
ADWEA raised $650 million debt, while the remaining $222 million was raised in equity, al-Sayari told reporters, according to Reuters. He added that a consortium consisting of Japan’s Marubeni Corp and China’s JinkoSolar Holding has been selected to build and operate the 1,177-megawatt plant.
“The financing which is completed is a $650 million project finance from local and international commercial banks,” al-Sayari said. He explained that the 25-year loan is structured in a way that will allow refinancing after five years.
Bank of Tokyo Mitsubishi was the leading arranger of the loan along with three other Japanese banks – Sumitomo Mitsui Banking Corporation, Mitsubishi UFJ Trust and Norinchukin Bank. French Banks – BNP Paribas Credit Agricole, Natixis – and First Abu Dhabi Bank were also part of the deal.
The equity portion will be contributed by ADWEA and the project consortium – Marubeni and JinkoSolar, al-Sayari added.
Construction of the independent solar plant project will begin immediately, with completion scheduled for the second quarter of 2019. It marks ADWEA’s first entry into the renewable energy market.
Abu Dhabi aims to generate 7% of its energy from renewable energy by 2020. Masdar, the government’s green energy firm, has also launched several renewable energy projects, including solar plants.
The winning bidders offered to provide electricity for 2.42 cents per kilowatt hour, one of the most competitive prices seen in the solar industry.
A special purpose company, Sweihan PV Power Company, has been formed to operate the project, located east of the city of Abu Dhabi, capital of the UAE. ADWEA holds 60% of the company while Marubeni and JinkoSolar each hold 20%.