DUBAI, Dec 11 (Reuters) - Dubai Electricity and Water Authority has closed the financing package that will back the construction of a 2,400 megawatt coal-fired power plant in the emirate, according to a statement from one of the developers on Sunday.
The Hassyan plant will be developed through a joint venture, with the Dubai utility firm holding a 51 percent stake and the rest split between China’s Harbin Electric and Saudi Arabia’s ACWA Power (IPO-ACWA.SE).
The financing package is divided between a senior secured loan and secured mezzanine financing, ACWA said. It did not specify exactly how much of the project’s $3.4 billion cost would be covered by the package but previously, officials had indicated around 80 percent would be provided by commercial bank loans.
In mezzanine finance, holders are only able to claim against the company if it defaults, once creditors with senior debt have been repaid.
The cash is being provided by lenders including Industrial and Commercial Bank of China, Bank of China, First Gulf Bank and Standard Chartered, ACWA added.
The coal plant is part of the emirate’s strategy to broaden its energy sources: by 2030, it is targeting around 7 percent of its electricity production from coal, as well as 25 percent from solar, 7 percent from nuclear power and 61 percent from gas.
Phase one of the coal plant is to be operational in March 2020, with all four 600 MW stages that make up the scheme to be completed by March 2023, according to ACWA’s statement. (Reporting by David French; Editing by Andrew Torchia)