Acwa Power signs agreement with Chinese investment fund

21 January 2016

Chinese investment vehicle will make equity investments and provide debt financing 

Saudi Arabia’s Acwa Power has signed a memorandum of understanding (MOU) with China’s state-owned investment fund Silk Road Fund to partner for some of the largest projects in the Middle East and North Africa power market.

Under the terms of the MOU, the two parties will cooperate on planned projects such as the Hassyan coal-fired independent power project (IPP) in Dubai and the Dairut combined-cycle IPP in Egypt.

For these and other future projects, Acwa will develop the projects, and the Silk Road Fund will make equity investments in the projects and provide debt financing.

In October, the consortium led by Saudi Arabia’s Acwa Power and China’s Harbin was selected as the preferred bidder for the 1,200MW Hassyan coal IPP in Dubai.

The selected consortium will develop the IPP under a build-own-operate (BOO) operate model, and will sign a 25-year power purchase agreement (PPA) agreement with Dewa.

China’s Harbin will build the plant in partnership with France’s Alstom. The French power firm will lead the engineering, procurement and construction (EPC) consortium, and will be in charge of the overall engineering of the plant. Netherland’s based Louis Dreyfus will build the coal handling facilities and France’s EDF will supply coal for the plant.

The 1,200MW plant will be delivered in two phases, with the first 600MW coming online in March 2020 and the remaining 600MW to be commissioned in March 2021.

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