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ACWA Power has announced the successful financial closure of the approximately SAR1.2 billion (US$320 million) Sakaka solar project, the first ever utility scale renewable energy project to be developed in Saudi Arabia.
Located in Al Jouf, north-west Saudi Arabia, at a site spanning over six square kilometres, the project involves the development of a photovoltaic power plant with an installed capacity of 300 MW. Upon completion, the plant will supply more than 75,000 households with green power while offsetting over 430,000 tonnes of carbon dioxide per year.
ACWA Power is developing the project in consortium with AlGihaz Holding Company, a major Saudi contractor and investor, under the landmark National Renewable Energy Program executed by the Renewable Energy Project Development Office (REPDO).
The partners have formed a new company, Sakaka Solar Energy Company (SSEC), to own the Sakaka power plant, with ACWA Power holding 70% and AlGihaz 30% through its subsidiary AlGihaz Renewable Energy Company. SSEC has concluded a 25-year Power Purchase Agreement (PPA) with Saudi Power Procurement Company (SPPC) acting as offtaker.
The transaction is 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 provided an equity bridge loan for the transaction.
The engineering, procurement and construction (EPC) contract for the project was awarded to a consortium of Mahindra Susten and Chint. 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 commercial operation date of the plant is scheduled to be towards the end of calendar year 2019.