Abu Dhabi set to close $872m financing for solar plant

The 1,177MW plant will be funded 25% by equity, and 75% by debt, ADWEA says

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Abu Dhabi’s government-owned power utility aims to close a financing package for a $872 million solar power plant, which will be the world’s largest, in April 2017, a senior official has said.

Earlier this month, Abu Dhabi Water and Electricity Authority (ADWEA) announced that it had selected a consortium of Japan’s Marubeni Corp and China’s JinkoSolar Holding to build and operate a 1,177MW plant. The duo was selected from six bids received by the authority in September 2016.

The solar power plant marks the first entry into the renewable energy space for ADWEA, and it comes as the UAE capital looks to generate 7% of its energy from renewables by 2020, a Reuters report said. The government’s green energy firm Masdar has launched several renewable energy projects, including solar plants.

Scheduled to be operational in 2019, the plant will be funded 25% by equity, and 75% by debt, Adel al-Saeedi, the acting director of privatisation at ADWEA, told Reuters. He added that ADWEA would contribute the equity, while local and international banks would fund the debt.

The winning bidders offered to provide electricity for 2.42 US cents per kilowatt hour, one of the most competitive prices seen to date in the solar industry, Saeedi pointed out.

He explained that a special-purpose company would be formed to operate the project; ADWEA would own 60% of the new entity, while Marubeni and JinkoSolar would hold the remaining 40%. Power generated from the new plant would be sold to Abu Dhabi for 25 years.

Saeedi added that the initial plan for the project was to have a capacity of 350MW, but capacity was increased when additional land became available in Sweihan, east of the city of Abu Dhabi.

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