Shanghai Electric Generation Group has officially signed an engineering, procurement and construction deal for the world’s largest thermo-solar plant, which will be located in Dubai.
The concentrated solar power (CSP) project, which is being built at a cost of $3.87bn, is now in the process of concluding a financing package with Chinese banks, Shanghai’s consortium partner ACWA Power said.
The two were awarded the project by Dubai Electricity and Water Authority in September last year after bidding the lowest levelised cost of electricity of 7.3 US cents per kilowatt hour (kW/h).
The CSP design features the “combination of a tower and parabolic troughs, which will collect heat and store it in molten salt to supply electricity on demand during the day and through the night”.
The tower will be the world’s tallest CSP tower at 260m.
Sheikh Mohammed bin Rashid Al Maktoum, the UAE’s Vice President and Prime Minister and Ruler of Dubai, attended the groundbreaking for the project last month.
Industrial and Commercial Bank of China (ICBC) is the mandated lead arranger of a financing package expected to include a $1.5bn senior loan.
Bank of China and ICBC are expected to provide almost 80 per cent of the senior debt.
“By signing this agreement, we have taken a significant step towards starting the engineering and construction works,” said ACWA Power chairman, Mohammad Abunayyan.
“We are committed to supporting Dubai’s Clean Energy Strategy through this project, which extends our portfolio in the energy sector in Dubai.”
The CSP project is the fourth phase of the Mohammed Bin Rashid Solar Park.
The wider development is set to generate 1,000MW of power by 2020 and 5,000MW by 2030.
The Dubai Clean Energy Strategy 2050 aims to increase the share of clean energy in Dubai’s total power output to 7 per cent by 2020, 25 per cent by 2030, and 75 per cent by 2050.