Dewa to award fifth phase of mega solar project before end of year

Dubai utility company announces the financial closing of the fourth phase on Sunday

Dubai, United Arab Emirates, March 24, 2019.  -- Press conference to announce new developments in the fourth phase of the Mohammed bin Rashid Al Maktoum solar park.  --  Saeed Mohammed Al Tayer, MD & CEO of Dewa.
Victor Besa/The National
Section:  BZ
Reporter:  Alkesh Sharma
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Dubai Electricity and Water Authority plans to award contracts for the fifth phase of the emirate’s mega solar park before the end of this year after closing the Dh16.2 billion financing of the fourth phase on Sunday.

"Fifth phase is already in the market and so far nearly 54 international and local companies have expressed interest in it," Saeed Al Tayer, chief executive of Dewa, told The National on the sidelines of an event announcing the financial closing of the fourth phase.

"We will evaluate [the companies] and give them the RFP [request for proposal] in the second quarter of this year. After that, we will receive the bids in the next three months and, after the final evaluations, we will award the actual work before the end of this year."

Dewa recently issued a request for qualification for developers to build and operate the 900 megawatt fifth phase of the Mohammed bin Rashid Al Maktoum Solar Park. The phase will use photovoltaic solar panels based on the independent power project (IPP) model and it will be commissioned in stages starting from the second quarter of 2021. IPP models involve the participation of the private sector in financing and developing a power project.

Dewa and the consortium led by Saudi Arabia’s Acwa Power and Silk Road Fund - owned by the Chinese Government - are aiming to complete the 950MW fourth stage of the project in next three years. The consortium has set up an entity called Noor Energy 1 to implement the project.

“Developments are allied with the proposed timetable of the project,” said Mr Al Tayer.

“Fourth phase is the largest single-site investment project in the world and it uses both concentrated solar power (CSP) and photovoltaic solar technologies based on the IPP model.”

Fourth phase includes 700MW of CSP and 250MW from PV solar panels. Unlike PV panels, CSP technology can store energy even when the sun goes down. This phase will provide clean energy for 320,000 residences and will reduce carbon emissions by 1.6 million tonnes annually.

The solar power projects currently operational in the solar park have a capacity of nearly 413MW. Dewa currently has three more projects under implementation with a capacity of 1,550MW. With the announcement of the fifth phase, the total capacity will reach 2,863MW, said Mr Al Tayer.

Dewa is on track to reach 5,000MW from solar by 2030 and achieving the objectives of the Dubai Clean Energy Strategy 2050 to produce 75 per cent of Dubai's total power output from clean energy and make Dubai the city with the lowest carbon footprint in the world by 2050.

The emirate is set to beat its 2020 clean energy target of 7 per cent and will be able to source 8 per cent of its power from renewables by next year, Mr Al Tayer said in January.

Dewa will invest Dh8bn on energy projects this year and has no plans to tap the bond market to finance its spending, Mr Al Tayer said at the time.

The lending group involved in the fourth phase of solar project include Agricultural Bank of China, Bank of China, China Everbright Bank, China Minsheng Bank, Commercial Bank of Dubai, Commercial Bank International, Industrial and Commercial Bank of China, Natixis, Standard Chartered Bank and Union National Bank. In addition, Bank of China, Commercial Bank of Dubai, Emirates NBD Bank, First Abu Dhabi Bank, Mashreq bank and Union National Bank have provided long-term loans.