Dewa signed a 25-year power purchase agreement for the 900MW fifth phase of the MBR solar park with a consortium of Acwa Power and GIC. Credit: MEED.

Privately owned Saudi utilities company Acwa Power has announced completing the signing of all financing agreements for the 900MW Shuaa Energy 3 solar photovoltaic (PV) project, which forms the fifth phase of the Mohammed bin Rashid al-Maktoum (MBR) solar park in Dubai.

Shuaa Energy 3 PSC is the special purpose vehicle incorporated for the project, in which Dubai Electricity & Water Authority (Dewa) has 60% ownership, with the remaining stake split between Acwa Power and Kuwait’s Gulf Investment Corporation (GIC).

The project involves the construction of a 900MW solar PV plant using bi-facial panels with tracking technology at a capital cost of around $564m.

In April, MEED reported that Dewa had signed a 25-year power purchase agreement (PPA) for the 900MW fifth phase of the MBR solar park with a consortium of Acwa Power and GIC.

The consortium submitted the lowest bid of 1.6953 cents a kilowatt-hour ($c/kWh) for the project in October 2019.

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The tariff was a world record-breaking low for unsubsidised PV solar production.

The only other bidder, a consortium of the UAE’s Masdar, France’s EDF and China’s Jinko Power, submitted a tariff of 1.725$c/kWh.

The engineering, procurement and construction (EPC) agreement for the project was signed with China’s Shanghai Electric in July 2020.

Project financing

“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 circa 27-year soft mini perm financing with both conventional and Islamic tranches,” Acwa Power said.

“In addition, the financing structure featured a set of equity bridge loans provided by local banks and also by Dewa,” the Saudi company added.

The financing group for the project includes Abu Dhabi Islamic Bank, Arab Petroleum Investment Corporation (Apicorp), Industrial & Commercial Bank of China, Emirates NBD Bank, Natixis, Samba Financial Group, Standard Chartered Bank and Warba Bank.

Additionally, a project recourse mezzanine tranche was provided by Commercial Bank International and equity bridge facilities were provided by Commercial Bank of Dubai, Emirates NBD Bank and Mashreqbank.

The Shuaa Energy 3 project will take the MBR solar park’s production capacity to 2,863MW.

The MBR solar park scheme’s phases and construction status are as follows:

  • 13MW phase 1: completed in 2013
  • 200MW phase 2: commissioned in 2017
  • 800MW phase 3: commissioning scheduled in 2020
  • 950MW phase 4: under construction

The MBR solar park has a planned total production capacity of 5,000MW, with investments valued at $13.6bn when completed.

This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.