Hassyan Energy Phase 1 PSC (Hassyan Energy) has announced the financial closure of the project. The completed financing secures the future of the Middle East’s first ultra-super critical coal development, and facilitates the production of 2,400 MW of net electricity by March 2023.
The total project investment is c. US$3.4 billion with limited recourse project financing split into a combination of senior secured financing and a secured mezzanine tranche. The banks and financial institutions involved included 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.
Hassyan Energy is a joint-venture between ACWA Power Harbin Holding Company (49%) and Dubai Electricity & Water Authority (DEWA) (51%). Phase 1 of the project consists of four units of 600 MW net power each, which will respectively be operational in March 2020, March 2021, March 2022 and March 2023. Earlier this year, both parties signed a Purchase Power Agreement (PPA) to enter into a 25-year contract to supply 2400MW electricity at a levelized tariff of less than 5 US Cents per kWh.
“The Hassyan clean coal power project underlines DEWA’s commitment to achieving the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to diversify the energy mix. It also reflects DEWA’s commitment to achieving the Dubai Clean Energy Strategy 2050, which focuses on producing electricity from clean coal as part of Dubai’s energy mix. 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% from solar energy, 7% from nuclear power, 7% from clean coal, and 61% from gas by 2030. DEWA continuously develops its electricity services by working to expand its projects, services, and facilities. DEWA’s future objectives aim to increase the efficiency and accountability of its infrastructure, to actively contribute towards the economic growth and prosperity of Dubai,” said HE Saeed Mohammed Al Tayer, MD & CEO of DEWA.
“We’re proud to have finalized yet another milestone partnership with DEWA, on another path breaking project that is helping to diversify the emirate’s energy mix,” said Mr. Mohammed Abunayyan, Chairman of ACWA Power. “More importantly, 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.”
Hassyan is the first coal-based power plant in the Gulf region, and is an ultra-supercritical plant designed to deliver best-in-class performance on efficiency and output as well as adherence to highest levels of environmental best practices globally.
The Hassyan plant will operate in compliance with aggressive emissions and environmental international standards, and to further guarantee compliance, the power plant will meet the limits set for fuel gas emissions—a stricter standard than emission limits in the Industrial Emissions Directive (IED) of the European Union and in the International Finance Corporation (IFC) guidelines.