Financing secured for third phase of Dubai solar park
Mohammed bin Rashid Al Maktoum Solar Park set to be the largest solar power plant in the world on completion
Financing of Phase 3 of the Mohammed bin Rashid Al Maktoum Solar Park has been completed, according to the Dubai Electricity & Water Authority (DEWA). The project boasts a sophisticated finance structure that is backed by seven institutions and includes Islamic investment.
Regional institutions such as Union National Bank, the Islamic Development Bank and the Arab Petroleum Investments Corporation (APICORP) are attached to the project, while on the global level, Natixis from France, Siemens Bank from Germany, Korea Development Bank, and Canada’s export credit agency, Export Development Canada (EDC) are involved.
Following the agreement, the third phase of the solar power plant becomes the largest renewable energy project in the Middle East to receive Sharia-compliant financing. The latter is said to be one of the fastest-growing segments of the global financial market.
“DEWA has adopted the Independent Power Producer (IPP) model to build the 800MW third phase of the Mohammed bin Rashid Al Maktoum Solar Park. It has generated international interest from global business and energy companies, which reflects the trust and interest from international investors in large projects adopted by the Dubai Government. This has been supported by the favourable existing regulatory and legislative frameworks in Dubai that enable public-private partnerships. The project has also set a global benchmark in solar tariffs at a price of 2.99 US cents per kilowatt-hour, a world-record-low tariff for solar power generation. The third phase will be operational by 2020,” said HE Saeed Mohammed Al Tayer, MD & CEO of DEWA.
A Masdar-led consortium of companies are involved in the project, and EDF Energies Nouvelles is developing the 800-megawatt (MW) project in partnership with DEWA.
Once completed, the 16 square-kilometre 800MW photovoltaic plant will be the largest of its kind in the world, and will generate around 2.5-million megawatt-hours of electricity per annum. Unlike conventional solar power arrays, the third phase of the solar park will use tilting panels that track the sun, which will help to maximise output.
“The Mohammed bin Rashid Al Maktoum Solar Park is the largest single-site solar park in the world based on the IPP model, and is instrumental to the Dubai Clean Energy Strategy 2050. The solar park’s production capacity will reach 5,000MW by 2030 with investments totaling $13bn. It will eventually save over 6.5-million tonnes of carbon emissions every year, supporting Dubai’s objectives to promote its sustainable goals,” added Al Tayer.
The plant is being delivered in three stages, and drilling and piling works are already underway for the placement of photovoltaic panels. Completion of stage A is due in 2018, while stage B and C – both capable of 300MW – is expected to be complete in 2019 and 2020 respectively.
