APICORP offers $70.5m in financing for Phase 5 of MBR Solar Park

Saudi Arabia-based Arab Petroleum Investments Corporation (APICORP), which is a multilateral development financial institution, has inked an agreement with Shuaa Energy 3 PSC, which is sponsored by the Dubai Electricity and Water Authority (DEWA), ACWA Power and the Gulf Investment Corporation, to provide $70.5m in financing for Phase 5 of development of the Mohammed bin Rashid Al Maktoum Solar Park in Dubai.

As part of a larger project finance facility worth $420.2m 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 $564m 900MW state-of-the-art solar photovoltaic (PV) plant.

Utilising bi-facial panels with tracking technology, the plant will produce the lowest levelized cost of electricity in the world at just under $0.017 (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 development of the largest single-site solar park in the world is expected to power 270,000 homes and offset 1.18 million tons of CO2 emissions annually.

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.

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.

Commenting on the agreement, the chief executive officer at APICORP, Dr Ahmed Ali Attiga, 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 approximately $450m of capital towards renewable projects as part of its strategic drive to enable MENA countries to utilise the region’s abundant renewables energy resources and help member countries achieve a more sustainable and diversified energy mix.

This includes $110m 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 million tons of CO2 emissions annually.

APICORP also provided a $50m 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.

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