Riyadhr: Riyadh-based ACWA Power has announced its successful closure of an SAR 1.2 billion ($320 million) financing for the Sakaka photovoltaic (PV) IPP, which has a capacity of 300 megawatts (MW) of power.

The deal is the "first ever utility scale renewable energy project" developed in the kingdom under the landmark National Renewable Energy Program executed by the Renewable Energy Project Development Office (REPDO), ACWA Power revealed.

The plant, which includes the launch of a new company called Sakaka Solar Energy Company (SSEC) is done as part of a consortium with Saudi contractor and investor AlGihaz Holding Company.

The transaction was "financed through limited recourse ring fenced project financing with the entire debt fully underwritten by Natixis as Initial Mandated Lead Arranger and Bookrunner. In addition, Arab National Bank (ANB) provided an equity bridge loan for the transaction," ACWA Power revealed in a statement.

SSEC will be 70%-owned by ACWA Power, while the remaining 30% will be owned by AlGihaz, through its subsidiary AlGihaz Renewable Energy Company.

Moreover, SSEC "has concluded a 25-year Power Purchase Agreement with the Saudi Power Procurement Company (SPPC) acting as offtaker," the mega Saudi energy firm added.

It is expected that the plant will begin commercial operation towards the end of 2019, the firm noted, highlighting that once completed, the 300 MW Sakaka PV IPP will supply over 75,000 households with eco-friendly power, in addition to "offsetting over 430,000 tonnes of carbon dioxide per year."

Commenting on the closure of the deal, ACWA Power's President and CEO Paddy Padmanathan said that his company was "excited" to begin the construction of the first utility scale PV plant in Saudi Arabia, noting that the new plant will allow ACWA Power to use its expertise and relationships to deliver "the lowest tariff for PV power."

ACWA Power also said that the new project was to create new jobs in the fields of construction, operations and maintenance as well as bolster local capabilities in general.

On the same line, Riyadh-based ACWA Power awarded the project's engineering, procurement and construction (EPC) contract to a consortium of Mahindra Susten and Chint.

The new plant will also help Saudi Arabia establish a renewable energy industry in the Kingdom, Padmanathan explained, noting that the new project would help the company in contributing to the Saudi Vision 2030.

"The operations and maintenance agreement was signed with Diaa Sakaka Operation and Maintenance Company, an affiliate of First National Operations & Maintenance Co. Ltd. (NOMAC)," the Saudi firm concluded.

Source: Mubasher

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