A consortium led by Saudi Arabia’s Acwa Power and China’s Harbin Electric has started construction work on the 2,400MW Hassyan coal-fired power plant in Dubai.

The GCC’s first coal-fired power plant is being developed under the independent power project (IPP) model, with the developer consortium having signed a 25-year power purchase agreement (PPA) with Dubai Electricity & Water authority (Dewa).

MEED reported in September that the project company had reached financial close for the $3.4bn scheme. The coal project will be funded by debt of $2.5bn and equity of $650m, according to sources close to the scheme.

The majority of the debt, about 78 per cent, is being raised from Chinese banks. Industrial and Commercial Bank of China (ICBC), China Construction Bank, Agriculture Bank of China and Bank of China are all participating in the transaction.

The shareholders in the project are:

• Dewa (51 per cent)
• Acwa Power (27 per cent)
• Harbin International (14.6 per cent)
• Silk Road Fund (Chinese sovereign wealth fund; 7.4 per cent)