Silk Road Fund group in financial close for Dubai project

26 March 2019 - 12:00 am UTC

A consortium comprising of firms from China, Saudi Arabia and the UAE has reached financial close for a USD 4.4bn solar park on the outskirts of Dubai.

The group, comprising of China’s Silk Road Fund, Saudi Arabia’s ACWA Power and Dubai Electricity and Water Authority (DEWA), will build the 950MW project in the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park.

The facility is slated to be the largest single-site solar park in the world, according to a 24 March ACWA statement. While the original plan was for 700MW generation, it was upgraded to 950MW early last year. The facility will be commissioned in the fourth quarter of 2020.

DEWA originally awarded the project to a consortium made up of ACWA (75%) and China’s Shanghai Electric (25%) in 2017. The price increased by USD 500m after the inclusion of a 250MW PV facility alongside a 600MW parabolic trough solar thermal plant and a 100MW solar tower thermal plant. The facility will be located in Seih Al Dahal.

The project is currently owned by a joint venture of which ACWA Power holds 51% and Silk Road Fund 49%.

The investors bid to build and operate the project at a levelised cost of electricity of USD 0.073 per kWh — the world’s lowest of its sort, according to ACWA. 

Project financing for the Concentrated Solar Power plant was secured in early 2018 with USD 2.9bn of debt — with 70% committed by Chinese lenders — and a USD 1.5bn equity bridge loan. 

The lending group to the project includes Agricultural Bank of China, Bank of China, China Everbright Bank, China Minsheng Bank, Commercial Bank of Dubai, Commercial Bank International, Industrial and Commercial Bank of China, Natixis, Standard Chartered Bank and Union National Bank. In addition, Bank of China, Commercial Bank of Dubai, Emirates NBD Bank, First Abu Dhabi Bank, Mashreq bank and Union National Bank have provided long-term loans.

The solar power projects currently operational in the park have a capacity of 413MW. DEWA has 3 more projects under implementation with a capacity of 1.55GW. The utility recently announced a fifth phase of 900MW that will use photovoltaic panels, bringing the total capacity of the five phases to 2.9GW.

In 2016, the Silk Road Fund also partnered with ACWA and DEWA to develop the 2.4GW Hassyan coal-fired power plant in Dubai.

 

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