Business | Investment

Shams Power Company raises $600m for Middle East's largest solar project

The $600 million closing marks the largest solar project transaction to date and combines financing from 10 regional and international lenders.

  • Staff Report
  • Published: 15:01 March 7, 2011
  • Gulf News

 Shams 1 project
  • Image Credit: Supplied photo
  • As one of Masdar's flagship projects, Shams 1 will directly contribute toward Abu Dhabi's target of achieving 7 per cent renewable energy power generation capacity by the year 2020.

Dubai: Shams Power Company on Monday announced the financial close of Shams 1, one of the world's largest concentrated solar power (CSP) projects and the first of its kind in the Middle East.

The $600 million(Dh2.2 billion) closing marks the largest solar project transaction to date and combines financing from 10 regional and international lenders.

Demonstrating strong interest from lenders, the financing - a non-recourse 22-year door-to-door fully amortizing structure - was oversubscribed with commitments totalling more than $900 million.

Shams 1 lenders included BNP Paribas, KfW, Mizuho, National Bank of Abu Dhabi, Natixis, Société Générale, Sumitomo Mitsui Banking Corporation, The Bank of Toyko-Mitsubishi, Union National Bank and WestLB. BNP Paribas acted as financial advisor.

"The dynamic deal team was able to leverage knowledge across the sponsor group resulting in an innovative structuring and a ground-breaking financing for a landmark deal," said Derek Rozycki, Executive Director, Structured Finance and Capital Markets at Mubadala, the parent company of Masdar.

"Going forward, we will continue to leverage our extensive expertise in international capital markets and our knowledge of the region to support these types of leading edge financing deals."

The joint venture between Masdar, Total and Abengoa will develop, build, operate and maintain the plant which will be located in Madinat Zayed, approximately 120 kilometres southwest of Abu Dhabi.

In addition to the strong solar irradiation in the area, the location was chosen to supplement ongoing efforts to develop the western region of Abu Dhabi by providing renewable power, as well as new jobs and a strengthened economy.

As one of Masdar's flagship projects, Shams 1 will directly contribute toward Abu Dhabi's target of achieving 7 per cent renewable energy power generation capacity by the year 2020.

Dr. Sultan Al-Jaber, CEO of Masdar, added: "Shams 1 is a milestone project for the region and will be a core contributor to Abu Dhabi's long-term renewable energy objectives. As the first utility scale, commercial solar power project in the Middle East, Shams 1 represents the realization of the vision that the Abu Dhabi leadership has for renewable energy in the Emirate. We thank our partners for their support and continued collaboration."

Further validating the strength of the project, Shams 1 was recently awarded the "Middle East Renewables Deal of the Year 2010" by Project Finance.

Shams 1 will be one of the largest concentrated solar power plants in the world, extending over an area of 2.5 km², with a capacity of approximately 100 MW and a solar field consisting of 768 parabolic trough collectors. Construction began during Q3 2010 and is expected to be completed in approximately two years.

Gulf News
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