Dubai Electricity and Water Authority (Dewa) announced a consortium including China’s Harbin Electric and Saudi Arabia’s ACWA Power as the preferred bidder to build and operate a 1,200 megawatt clean coal power plant in Dubai.
Harbin Electric and Alstom of France will build the plant while ACWA and US-based NRG Energy along with the former two, will operate it.
The plant is the first phase of the Hassyan clean coal project. The first phase will comprise two units, one unit of 600 MW to be operational by March 2020 and another unit of the same size by March 2021.
The consortium bid to provide electricity at a levelised cost of 4.501 US cents KW per hour based on May 2015 coal prices, Dewa said.
Total cost of phase one of the project is $1.8bn, the financing will be arranged as 78% debt and 22% equity, Dewa mentioned.
“The equity part is coming 51% from Dewa, which amounts approximately $54.4m (AED200m) and the balance 49% from the developers consortium,” said HE Saeed Mohammed Al Tayer, MD and CEO of Dewa.
The 78% debt will come from a consortium of regional, international banks and export credit agencies, mentioned Paddy Padmanathan, president and CEO of Acwa Power.
“We will be working with Chinese banks like Industrial and Commercial Bank of China (ICBC), Bank of China with whom we have got very good relationships. We are working with several regional banks as well like Standard Chartered and First Gulf Bank (FGB),” said Padmanathan.
He added, “We expect that coal will come from countries like Australia, South Africa. At the end of the day, we as the developer and supplier of electricity needs to assure that the coal supply is part of the transactions.”
The power purchase agreement (PPA) is expected to be signed by February 2016, claimed Padmanathan.
