The Arab Petroleum Investments Corporation (APICORP), multilateral development financial institution, has signed an agreement with Shuaa Energy 3 P.S.C sponsored by Dubai Electricity and Water Authority (“DEWA”), ACWA Power and Gulf Investment Corporation, to provide USD70.5 mn in financing for the fifth phase of development of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai, UAE.
Part of a larger project finance facility amounting to USD420.2 mn provided by a number of local, regional and international banks, the funds will be used in the development, construction, ownership, operation and maintenance of a USD564 mn 900MW state-of-the-art solar photovoltaic (PV) plant. Utilizing bi-facial panels with tracking technology, the plant will produce the lowest levelized cost of electricity in the world at just under USD0.017 (1.7 cents) per kWh.
The project is aligned with Dubai’s Integrated Energy Strategy 2030 as well as Clean Energy Strategy 2050, aimed at securing a sustainable supply of energy and diversifying energy supply sources. Phase 5 of the development of the Park, the single-site solar park in the world, is expected to power 270,000 homes and offset 1.18 million tons of CO2 emissions annually. It also marks a crucial milestone for Dubai as the city aims to reduce its reliance on imported natural gas by achieving 7% of installed capacity from solar energy by 2020 and 25% by 2030.
Dr. Ahmed Ali Attiga, Chief Executive Officer at APICORP, said: “APICORP continues to be a leading player in the advancement of the MENA renewables sector, as part of the global transition towards sustainable low-carbon energy sources. We are delighted to partner with DEWA, ACWA Power and GIC on yet another pioneering initiative which will benefit Dubai economically and environmentally. The agreement represents the latest milestone in our quest to expand our green energy portfolio and support the scaling up of renewable energy technologies through effective tailored financing solutions.”
Over the past four years, APICORP has committed around USD450 mn of capital towards renewable projects as part of its strategic drive to enable MENA countries to utilize the region’s abundant renewables energy resources and help Member Countries achieve a more sustainable and diversified energy mix.
This includes a USD110 mn in financing for Shuaa Energy 2, an 800MW PV plant developed by Masdar and EDF Energies Nouvelles in phase 3 of the MBR Solar Park that provides power to 160,000 homes and offsets 1.4 mn tons of CO2 emissions annually.
APICORP also provided a USD50 mn credit facility to SirajPower and acquired an equity stake in Yellow Door Energy, both of which are based in the UAE. It also acquired a 20% stake in the Jordan Wind Power Company, the Corporation’s first-ever equity investment in a wind venture and in Jordan.
Since 2005, APICORP has partnered with ACWA Power to finance several key independent power and water plants (IWPP) and solar PV plants in the MENA region, including projects in the UAE, Saudi Arabia, Bahrain, and Egypt.
As part of the agreement, the power generated from the plant will be sold to DEWA, which owns 60% of the Shuaa Energy 3 PSC, a special-purpose vehicle incorporated for this project. The balance is owned by ACWA Power and GIC at 24% and 16%, respectively.