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World first: Abu Dhabi’s desal project obtains first ever ‘sustainable loan’ qualification

Abu Dhabi’s desalination project obtains first ever ‘sustainable loan’ qualification

ACWA Power has announced that the Taweelah IWP has obtained the first-ever ‘sustainable loan’ qualification for a water desalination project globally. The $758 million project finance loan with a contractual tenor of 32.4 years will finance the largest reverse osmosis plant in the world once completed in 2022.

According to a statement from ACWA Power, the project finance loan is dedicated to the financing of the design, construction, operation and maintenance of a 200 million imperial gallons per day reserve osmosis plant and associated infrastructure and facilities. The plant will be constructed in the existing Taweelah complex, in Abu Dhabi, UAE. The project also includes a 68 MW peak photovoltaic power plant to complement the energy supply from the procurer’s grid.

Vigeo Eiris provided an independent second party opinion on the sustainability credentials and management of this project finance loan, and confirmed that it is aligned with the four components of both the Green Loan Principles (published by the LMA in 2018) and the Social Bond Principles (published by the ICMA in 2018, and used in this case in the absence of published Social Loan Principles).

French investment bank- Natixis acted as the initial mandated lead arranger, documentation bank, hedge provider, global facility agent and sustainable loan coordinator. It is also the sole arranger and investment agent under the Islamic Equity Bridge Loan for ACWA Power’s equity portion.

Simon Eedle, regional head for the Middle East, Corporate & Investment Banking at Natixis, said: “This massive project and its sustainable features and benefits is a new milestone for Natixis in the region”.

Meanwhile, Orith Azoulay, global head of Green & Sustainable Finance, Corporate & Investment Banking at Natixis, added: “This sustainable loan demonstrates the bank’s capacity to accompany key regional sponsors in their sustainable journeys to develop strategic and sustainable infrastructures”.

Paddy Padmanathan, president & CEO of ACWA Power, said that the company places huge value in receiving this independent validation by a reputable assessor, as this qualification accentuates their unwavering dedication to the sustainable growth and development of countries in the region.

“Taweelah IWP is a strategic project for us, that is revolutionizing the industry by setting new standards for sustainable desalination, tackling industry challenges and pioneering new achievements through cutting edge technologies,” he added.

ACWA Power is the lead developer and operator of the project and a 40 per cent shareholder, with the remaining 60 per cent is contributed by the Government of Abu Dhabi through Abu Dhabi Power Corporation and Mubadala Development Company PJSC. Emirates Water & Electricity Company (EWEC), a fully-owned entity of the Government of Abu Dhabi and the water & power supplier of the region, is the sole off taker of the project under a 30-year contract, the statement added.

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