DEWA gets fi­nance for $3.4bn coal power plant

Kuwait Times - - BUSINESS -

DUBAI: Dubai Elec­tric­ity and Water Au­thor­ity has closed the fi­nanc­ing pack­age that will back the construction of a 2,400 megawatt coal-fired power plant in the emi­rate, ac­cord­ing to a state­ment from one of the devel­op­ers yes­ter­day.

The Hassyan plant will be de­vel­oped through a joint ven­ture, with the Dubai util­ity firm hold­ing a 51 per­cent stake and the rest split be­tween China’s Harbin Electric and Saudi Ara­bia’s ACWA Power. The fi­nanc­ing pack­age is di­vided be­tween a se­nior se­cured loan and se­cured mez­za­nine fi­nanc­ing, ACWA said. It did not spec­ify ex­actly how much of the project’s $3.4 bil­lion cost would be cov­ered by the pack­age but pre­vi­ously, of­fi­cials had in­di­cated around 80 per­cent would be pro­vided by com­mer­cial bank loans. In mez­za­nine fi­nance, hold­ers are only able to claim against the com­pany if it de­faults, once cred­i­tors with se­nior debt have been re­paid. The cash is be­ing pro­vided by lenders in­clud­ing In­dus­trial and Com­mer­cial Bank of China, Bank of China, First Gulf Bank and Stan­dard Char­tered, ACWA added.

The coal plant is part of the emi­rate’s strat­egy to broaden its en­ergy sources: by 2030, it is targeting around 7 per­cent of its elec­tric­ity pro­duc­tion from coal, as well as 25 per­cent from so­lar, 7 per­cent from nu­clear power and 61 per­cent from gas.

Phase one of the coal plant is to be op­er­a­tional in March 2020, with all four 600 MW stages that make up the scheme to be com­pleted by March 2023, ac­cord­ing to ACWA’s state­ment.

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