Shuaa Energy 3 PSC is the fifth phase of the solar park
ACWA Power, the Saudi developer, investor and operator of power generation and desalinated water plants, has said that it has completed the signing of all financing agreements for the 900MW solar PV project, Shuaa Energy 3 PSC, which is the fifth phase of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai.
Shuaa Energy 3 PSC is the special purpose vehicle incorporated for the project, a statement from the Saudi group said. 60% of the entity will be owned by the Dubai Electricity and Water Authority (DEWA), while the balance will be split between ACWA Power and Gulf Investment Corporation (GIC), it added.
The project includes the construction of a 900MW solar PV plant, using bi-facing panels with tracking technology, at a cost of $564 million. The project has been the focus of significant international interest, having demonstrated one of the lowest levelized cost of electricity in the world, at USD cents 1.6953 per kWh.
The financing for the project has been based on the principles of limited recourse project financing, with the senior debt provided by a number of international, regional and local banks, along with a project recourse mezzanine tranche committed by a regional bank, structured as a 27-year soft mini perm financing with both conventional and Islamic tranches, the statement added.
Furthermore, the financing structure featured a set of equity bridge loans provided by local banks and also by DEWA, it said.
Commenting on the deal, ACWA Power President and CEO Paddy Padmanathan said: “Securing this amount of long tenor project financing for Shuaa Energy 3 PSC even as the COVID-19 pandemic continues to cause social and economic disruption to the entire world illustrates the combined capabilities and trusted partnership between ACWA Power and DEWA.”
“We are delighted to have achieved this significant milestone, which reflects confidence of the financial community in this partnership, and the role and iconic status of the fifth phase of Mohammed bin Rashid Al Maktoum Solar Park in delivering Dubai’s Clean Energy Strategy 2050,” he added.
Chief Investment Officer Rajit Nanda said: “Project financing of this magnitude having been successfully raised from nine project finance lenders in the midst of a global pandemic, is the ultimate testament to Dewa’s credibility as a counterparty and the success of their IPP programme, as well as ACWA Power’s focus and proven ability to deliver power and desalinated water reliably and responsibly at low cost.”
The EPC agreement for the construction of the project was signed with Shanghai Electric in July 2020, the statement concluded.