A consortium of advisers including Trowers & Hamlins LLP (acting as legal counsel), Ernst & Young (EY) (acting as lead and financial consultants) and GOPA-International Energy Consultants GmbH (acting as technical consultants) advised Dubai Electricity and Water Authority (DEWA) in relation to the fifth phase (Project) of the Mohammed bin Rashid Al Maktoum Solar Park (MBR Solar Park) which achieved financial close on 15 October 2020.
With an estimated completion date of 2030, the MBR Solar Park will be largest single-site solar park of its kind in the world with a total capacity of 5,000 MW. The Project, which represents the fifth phase of the MBR Solar Park, will have a capacity of 900MW. The Project will generate enough clean energy to power approximately 270,000 homes in Dubai.
The successful bidder submitted a then new world-record low tariff (for unsubsidised levelised cost of electricity (or LCOE)) PV solar power generation of $1.695 cents a kilowatt hour ($c/kWh). DEWA awarded the project to the developer consortium of International Company for Water and Power Projects (ACWA Power) and Gulf Investment Corporation (GIC) (together the Consortium).
DEWA, the Consortium and relevant stakeholders, with the assistance of the Consultants, previously reached commercial close on 29 April 2020.
In addition to drafting the request for proposals (RFP), the Consultants also developed the full suite of project agreements. The key project agreements include the power purchase agreement (PPA), shareholders' agreement, the musataha agreement and high-level term sheets for the engineering, procurement and constructions (EPC) contract and operation and maintenance (O&M) contract. Since commercial close, the Consultants have advised on all matters up to the successful satisfaction of the conditions for financial closing.
In a move away from precedent transactions, DEWA has successfully procured the Project without the benefit of a government guarantee (in relation to DEWA's payment obligations under the PPA). The Consortium was able to secure lender support for the Project based, in part, on DEWA's now strong track record of delivering bankable solar IPPs.
The Trowers & Hamlins' team was led by partners Thomas Wigley and Shaun Hardiman who were supported by Lydia Clatworthy, Sam Wood, Jennifer Barnett and Jacques Domican-Bird. The EY team was led by Rajeev Singh, partner, and Abhayjit Sinha, Director of Strategy and Transactions with support from Mohammed ElSewedy and Vahe Hadajian. The intec team was led by project managers Karsten Ley and Kuno Schallenberg.
Thomas Wigley, partner and head of the Energy and Natural Resources' practice at Trowers & Hamlins, said: "We have been delighted to work with DEWA on the strategic Phase V project and the successful achievement of financial close. This clearly demonstrates the confidence which the market has in DEWA and the renewable energy market in the Emirate of Dubai."
Rajeev Singh of EY said: “The successful closing of this Project further cements EY’s commitment to DEWA as well as the growing renewable energy market across MENA (where EY is advising on 5 solar projects). Continued low tariffs are strong testimony to DEWA's profile, especially on this landmark project which has set a new benchmark on increased risk transfer to the private sector (no sovereign guarantee, and no base rate movement).”
Karsten Ley, noted that: “The rising demand for green electricity is changing the energy world and we need more speed in the global energy transition "Energiewende". intec is proud to drive the direction of Dubai's energy turnaround with DEWA's award winning project.””
