Dubai reaches financial close for $1.5bn solar project

21 February 2024
Masdar will develop the 1,800MW sixth phase of Mohammed bin Rashid Solar Park

State utility Dubai Electricity & Water Authority (Dewa) and Abu Dhabi Future Energy Company (Masdar) have reached financial close for the 1,800MW sixth phase of the Mohamed bin Rashid Solar Park in Dubai.

The independent power producer (IPP) project is expected to cost up to AED5.51bn ($1.5bn).

According to Masdar, the lending group to the project includes:

  • Abu Dhabi Commercial Bank (local)
  • Commercial Bank of Dubai (local)
  • First Abu Dhabi Bank (local)
  • HSBC (UK)
  • Standard Chartered Bank (UK)
  • Abu Dhabi Islamic Bank (local)
  • Warba Bank (local)

Dewa selected Masdar to develop and operate the project in August last year, two months after it received bids for the contract.

The companies did not disclose the debt-to-equity ratio for the project's financing.

Once completed in 2026, the 1,800MW sixth phase of the solar park will increase its total production capacity to 4,660MW, according to Saeed Mohammed Al Tayer, Dewa managing director and CEO.

The state utility aims to have around 27% of the generation mix sourced from clean energy sources by 2030.

Masdar, teaming up with EPC contractor China Machinery, submitted a low bid of $cents1.62154 a kilowatt hour ($c/kWh) for the contract.

Saudi Arabia’s Acwa Power, along with EPC contractor China Energy Engineering Corporation (CEEC), submitted a higher bid of $c1.99/kWh, about 22 per cent more than the levelised electricity cost (LCOE) offered by Masdar.

Dewa received and opened the two bids on 7 June.

Last month, the renewable engineering, procurement and construction (EPC) arm of the India-headquartered Larsen & Toubro (L&T) Power Transmission & Distribution business announced winning a turnkey EPC contract for the project.

The solar farm will be built on a 20-square-kilometre plot at the solar park, about 50 kilometres from the city of Dubai.

L&T’s project scope includes the installation of two gas-insulated switchgear units, high-voltage underground cabling and medium-voltage distribution networks, in addition to the solar photovoltaic (PV) farm.

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