A consortium of Saudi-based developer ACWA Power and contractor AlGihaz have closed financing of the SAR1.2 billion (US$319 million) Sakaka solar project standing at 300MW in Al Jouf, Saudi Arabia, a project that attracted headlines across the world last year after the government chose ACWA Power despite Masdar putting in the lowest ever solar bid.
The transaction for the project, which has a tariff of just 8.781 halalas/kWh (US¢2.3417/kWh), is financed through limited recourse ring fenced project financing with the entire debt fully underwritten by Natixis. In addition, Arab National Bank provided an equity bridge loan for the transaction.
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A new company 'Sakaka Solar Energy Company (SSEC)' has been formed with ACWA Power holding 70% and AlGihaz 30% through its subsidiary AlGihaz Renewable Energy Company to own the Sakaka PV Plant. A 25-year power purchase agreement (PPA) has been signed with Saudi Power Procurement Company (SPPC) acting as offtaker.
The commercial operation date of the plant is scheduled to be towards the end of 2019, with Indian firm Mahindra Susten and China's Chint performing EPC services. The O&M agreement was signed with Diaa Sakaka Operation and Maintenance Company, an affiliate of First National Operations & Maintenance (NOMAC).
The project comes under the landmark National Renewable Energy Program by the Renewable Energy Project Development Office (REPDO).
Paddy Padmanathan, president and CEO of ACWA Power, said: “We are excited to commence construction of this first utility-scale PV plant in the Kingdom project which will allow us to utilize the considerable expertise and relationships with technology providers and the supply chain we have acquired through the development of 3,000MW of renewable energy projects in five other countries over the last seven years to now deliver at our home not only the lowest tariff for PV power but also to start establishing a renewable energy industry in the Kingdom which we believe will become one of the most significant cornerstone to deliver several of the objectives of Vision 2030 of the Kingdom.”
The Saudi National Renewable Energy Program aims to accelerate the shift towards utilizing renewable energy resources and ensuring energy security at the lowest cost.
Back in January, PV Tech blogged about how bifacial technology was the likely reason the world’s lowest ever solar bid was rejected.