UAE 1.2GW solar farm reaches financial close

The $650m financing package is backed by a Japan-led consortium of eight commercial lenders, with $220m in equity to be provided by the project sponsors.

Abu Dhabi’s 1,177MW Sweihan solar project, billed as the largest solar power plant in the world, has reached financial close by securing a $870 million debt and equity package.

The mega-solar plant is majority-owned by Abu Dhabi Water and Electricity Authority, which holds a 60 percent interest, while Chinese solar developer JinkoSolar and Japanese trading company Marubeni Corporation each own a 20 percent stake. The three sponsors are providing $222 million in equity for the project. 

Eight international and domestic commercial banks, including four Japanese lenders, have committed to provide the $650 million financing package. Bank of Tokyo-Mitsubishi UFJ is acting as lead arranger, with the balance coming from Japan’s Norinchukin Bank, Mitsubishi UFJ Trust and Banking Corporation and Sumitomo Mitsui Banking Corporation as well as France’s BNP Paribas, Crédit Agricole, Natixis and the First Abu Dhabi Bank. 

The Sino-Japanese tie-up was selected by the ADWEA as the winning bidder to build and operate the project last year, when it submitted the world’s lowest solar bid at that time, at 2.42 cents per kWh. 

The project secured a power purchase agreement in February with state-owned utility Abu Dhabi Water and Electricity Company, a unit of ADWEA, for a period of 25 years. The plant’s construction has commenced, with completion scheduled for April 2019.   

The United Arab Emirates, as well as other Middle Eastern countries, are looking to increase renewable power capacity to reduce their reliance on fossil fuels and meet rising power demand. Under the UAE Energy Plan 2050, the emirates aim to have 44 percent of its power supply generated from renewable sources in the next 33 years. More than 90 percent of its energy supply currently comes from gas.