A consortium led by Abu Dhabi’s renewable energy company Masdar is aiming to raise an $800 million loan to help fund the building of the 800-megawatt (MW) third phase of Dubai’s solar park, the company’s chief executive told reporters on Monday.
The consortium, which also includes Spanish companies Fotowatio Renewable Ventures (FRV) and Gransolar Group, was selected to complete the third phase of Sheikh Mohammed bin Rashid al-Maktoum Solar Park, Dubai Electricity and Water Authority (DEWA) said in a statement.
The consortium is in talks with banks including National Bank of Abu Dhabi, First Gulf Bank and Union National Bank to provide project finance, said Mohamed al-Ramahi, chief executive of green energy firm Masdar, wholly owned by Abu Dhabi investment fund Mubadala.
The funding should be finalized by November or December, he said.
The selection of the Masdar-led consortium is a testament to the vision of the U.A.E leadership, the foresight of the Dubai Clean Energy Strategy 2050, and the commitment of Dewa to realize ambitious renewable energy projects. It also reflects the technical expertise and proven track record that Masdar has built over the last 10 years, stated Dr Sultan Ahmed Al Jaber, the Chairman of Masdar and the United Arab Emirates Minister of State. The U.A.E firmly believes that meeting the world’s growing energy demand requires a mix of energy sources, where we build on our existing assets of conventional energy, complementing them with alternative sources. By using multiple sources of energy such as natural gas, nuclear and solar, we are delivering both base-load generating capacity and the ability to meet peak energy demand efficiently and cost effectively, said the minister.
DEWA didn’t name the other bidders, but sources previously told Reuters that China’s Jinko Solar, France’s EDF and Saudi Arabia’s ACWA Power were among companies either bidding alone or as part of different consortia.
The Masdar-led consortium defeated four other contenders for the third phase and submitted the lowest generation price to build the plant at 2.99 cents per kilowatt-hour (kWh), DEWA said.
The third phase of the park will be operational by 2020, it added.
It is planned to be the largest single-site solar park in the world, producing 5,000 MW by 2030 with a total investment of AED50 billion ($13.6 billion), DEWA said. This will be enough to power 800,000 homes with a total investment of Dhs50 billion.
The capacity of the park has been increased twice from its original 1,000 MW plan due to the steady reduction in the price to generate solar energy. Although there are numerous factors to electricity pricing, the 75 per cent decrease in the cost of solar PV panels in the five years to 2014 is a crucial factor. It is expected that this will continue to fall.
Dubai is aiming to generate 7 percent of its total power from clean energy sources in the next four years, 25 percent by 2030 and 75 per cent by 2050.