DEWA refinances $2.70 billion Noor Energy 1 solar project ahead of schedule

Summary

• DEWA completed a $2.70 billion refinancing of Noor Energy 1 ahead of its target date.
• Noor Energy 1 is the 950-megawatt fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park.
• DEWA says the deal cuts financing costs and signals lender confidence in Dubai.

The latest

Dubai Electricity and Water Authority (DEWA) said a $2.70 billion refinancing of Noor Energy 1 has closed ahead of its target date, restructuring the debt behind the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park. Managing Director and CEO Saeed Mohammed Al Tayer announced the transaction at DEWA's Al Sheraa headquarters before lenders, sponsors and partners. He said it lowers financing costs over the asset's operating life.

Details

• The number: The refinancing covers $2.70 billion of debt tied to Noor Energy 1, according to DEWA. Al Tayer said the transaction closed well ahead of its target date, though DEWA did not publish the new pricing terms, the tenor of the refinanced facilities, or the names of the participating lenders.
• The asset: Noor Energy 1 has an installed capacity of 950 megawatts, DEWA said. It combines concentrated solar power, parabolic trough and photovoltaic technologies, with up to 15 hours of thermal energy storage — the feature that allows the plant to dispatch electricity after sunset rather than only during daylight hours.
• The CEO's framing: Al Tayer described Noor Energy 1 as a national asset and as the world's largest single-site concentrated solar power project. He said the transaction represents more than a financial exercise, positioning the plant as a cornerstone of the Dubai Clean Energy Strategy 2050 and a source of clean, dispatchable power day and night.
• The financial case: DEWA said the refinancing optimised financing costs and strengthened the project's financial structure, generating what it called substantial savings over the plant's operational life. The authority did not quantify those savings, give a figure for the reduction in debt service, or state how the benefit is shared between DEWA and the project sponsors.
• The ownership: Noor Energy 1 was established by DEWA together with a consortium led by ACWA Power to design, build and operate the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park. DEWA's announcement did not break down the current equity stakes held by each shareholder in the project company.
• The signal: Al Tayer said the size of the refinancing demonstrates the confidence of international, regional and local financial institutions in the UAE, Dubai and DEWA. He argued it reinforces Dubai's standing as a destination for long-term sustainable investment, an assessment attributed to DEWA rather than to the lenders themselves.
• The setting: The announcement was made at an event at Al Sheraa, DEWA's headquarters, attended by representatives of lenders, sponsors, partners and the team that worked on the refinancing. DEWA did not identify the individual institutions represented or say when the financial close formally took place.

Background

Noor Energy 1 is the fourth phase of the Mohammed bin Rashid Al Maktoum Solar Park, Dubai's flagship renewable build-out. Its concentrated solar power design with thermal storage was chosen to deliver power after dark, a capability standard photovoltaic plants lack without batteries.

Between the lines

Refinancing typically becomes attractive once a project has moved past construction risk and into steady operation, when lenders price the debt more cheaply. DEWA's emphasis on early completion and on optimised costs points to that shift for a plant whose 15-hour storage and 950-megawatt capacity made its original financing complex. The absence of published pricing terms leaves the scale of the savings resting on DEWA's own characterisation.

What's next

Watch for DEWA disclosure of the refinancing's pricing and tenor, any ACWA Power filing detailing its share of the savings, and updates on remaining phases of the Mohammed bin Rashid Al Maktoum Solar Park.

Source: WAM (Emirates News Agency) via Zawya