Complex Made Simple

Abu Dhabi aims to close $872 million solar plant financing in April

Abu Dhabi’s government-owned power utility aims to close a financing package for a 3.2 billion dirham ($872 million) solar power plant, which will be the world’s largest, in April, a senior official at the utility said on Sunday.

Last week, Abu Dhabi Water & Electricity Authority (ADWEA) said it had selected a consortium of Japan’s Marubeni Corp and China’s JinkoSolar Holding to build and operate the 1,177 megawatt plant. The duo were selected from six bids received by ADWEA in September.

The project is ADWEA’S first foray into renewable energy. Abu Dhabi aims to generate 7 percent of its energy from renewables by 2020; the government’s green energy firm Masdar has launched renewable energy projects including solar plants.

The plant, to become operational in 2019, will be funded 25 percent by equity and 75 percent by debt, Adel al-Saeedi, acting director of privatisation at ADWEA, told Reuters. ADWEA would contribute the equity while local and international banks would fund the debt.

The winning bidders offered to provide electricity for 2.42 U.S. cents per kilowatt hour, one of the most competitive prices seen to date in the solar industry, Saeedi said.

A special-purpose company would be formed to operate the project; ADWEA would own 60 percent of the company while Marubeni and Jinko would hold 40 percent. Power generated would be sold to Abu Dhabi for 25 years.

Initially the plant at Sweihan, east of the city of Abu Dhabi, was to have a capacity of 350 MW, but ADWEA increased the capacity because additional land became available, said Saeedi.