Shuaa Energy 3 PSC is the special purpose vehicle incorporated for the project, with 60 per cent ownership by the Dubai Electricity and Water Authority (Dewa), and the balance split between Acwa Power and Gulf Investment Corporation (GIC), said a statement from the Saudi group.
The project involves the construction of a 900MW solar PV plant, using bi-facial panels with tracking technology at a capital cost of $564 million, and has been the focus of significant international interest, having demonstrated one of the lowest levelised cost of electricity in the world of USD cents 1.6953 per kWh.
The financing for the project is 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.
In addition, the financing structure featured a set of equity bridge loans provided by local banks and also by Dewa.
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 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.
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