Construction work on the 2GW Al Dhafra solar project in Abu Dhabi is set to begin as the consortium behind the development announces it has reached financial closing.
An approximately US$1 billion transaction has been funded via project financing with BNP Paribas as bookrunner together with Bank of China, Crédit Agricole, HSBC, MUFG, Sumitomo Mitsui Banking Corporation and Standard Chartered as mandated lead arrangers.
Abu Dhabi National Energy Company (TAQA) will own 40% of the project, while the remaining partners – Masdar, EDF Renewables and JinkoPower – will have a 20% stake each.
The consortium was announced as the party behind the winning US$0.0135/kWh tariff price for the project earlier in the year – a world record-low price at the time. TAQA revealed this week that upon financial closing, the tariff was lowered to US$0.0132/kWh, primarily driven by “hedging and financing cost improvements, in addition to other optimisation efforts”.
Located in the region of Al Dhafra, 35 kilometres south of Abu Dhabi city, Al Dhafra will span 20 square kilometres of desert and feature 4 million solar panels, supplying power to Emirates Water and Electricity Company.
According to TAQA, the plant will deploy “the latest in crystalline, bifacial solar technology”, helping it to reduce Abu Dhabi’s CO2 emissions by more than 2.4 million tonnes per year when operational.
The four partners behind the project have a 30-year power purchase agreement in place, with the facility expected to come online in 2022.
Mohamed Jameel Al Ramahi, CEO of Masdar, said achieving financial close for the “monumental” solar project “underlines the growing appeal of renewable energy from both a commercial and environmental perspective”.
Construction of the park follows on from the Emirate’s debut utility-scale solar project, the 1.2GW Abu Dhabi Noor plant that was developed by Japan’s Marubeni and the Abu Dhabi Water and Electricity Authority and began commercial operations in 2019.
Al Dhafra will be “the next generation of solar plant in Abu Dhabi”, according to EDF Renewables CEO Bruno Bensasson. “The achievement of financial close with our partners and the investment community is a major milestone for the project. We are now fully mobilised to support the construction of the solar plant.”