Dubai Hassyan clean coal plant secures $2.47bn of financing

Hassyan Energy, a joint venture between a consortium led by Saudi’s ACWA Power and Dubai Electricity and Water Authority (DEWA), has closed $2.47bn of financing for the 2,400MW Hassyan clean coal project.

The total project investment is $3.4bn with financing a combination of senior secured financing and a secured mezzanine tranche.

Industrial and Commercial Bank of China, Bank of China, Agricultural Bank of China, China Construction Bank, Silk Road Fund, First Gulf Bank, Union National Bank, Standard Chartered Bank, National Commercial Bank, Commercial Bank International and Emirates NBD were among those involved.

The first phase of the Hassyan clean coal project comprises four units of 600MW net power, with each to be operational consecutively in March 2020, March 2021, March 2022 and March 2023.

In November, DEWA confirmed the start of construction for the $1.8bn project.

Read: Dubai’s DEWA confirms start of construction on 2,400MW coal plant

Earlier this year the ACWA consortium, which includes China’s Harbin Electric, and DEWA signed a purchase power agreement to enter into a 25-year contract to supply power at a levelised tariff of less than 5 US cents per kWH.

Under the terms of the contract, the consortium has been required to put in place the secure delivery of coal to the project.

“The commitments from a diverse group of lenders from various jurisdictions demonstrates the strength of the transaction and, above all, further demonstrates the faith and belief that financial markets have in DEWA’s track record and strength and belief in the Dubai initiatives in delivering large scale projects on the PPP framework,” said Mohammed Abunayyan, chairman of ACWA Power.

“DEWA works to achieve the fifth pillar of the Dubai Clean Energy Strategy 2050, which focuses on creating an environmentally-friendly energy mix, with 25 per cent from solar energy, 7 per cent from nuclear power, 7 per cent from clean coal, and 61 per cent from gas by 2030,” said Saeed Mohammed Al Tayer, MD and CEO of DEWA.

Hassyan Energy is 49 per cent owned by the ACWA consortium and 51 per cent owned by DEWA.

The Hassyan plant is described as the first coal-based power plant in the Gulf region and will operate in compliance with emissions and environmental standards for fuel gas plants.

“DEWA works to achieve the fifth pillar of the Dubai Clean Energy Strategy 2050, which focuses on creating an environmentally-friendly energy mix, with 25 per cent from solar energy, 7 per cent from nuclear power, 7 per cent from clean coal, and 61 per cent from gas by 2030,” said Saeed Mohammed Al Tayer, MD and CEO of DEWA.