Taqa-led group refinances Al Dhafra solar to repay existing debt

The consortium that owns the Al Dhafra solar project has raised $871 million (AED3.2 billion) through long-term green bonds to refinance existing debt obligations.

Abu Dhabi’s Taqa holds a 40 percent stake in the project, while Masdar, France’s EDF, and Jinko Power each hold a 20 percent stake.

Emirates Water and Electricity Company (Ewec), the sole purchaser of power and water in Abu Dhabi, is the principal offtaker.

The green bond has a coupon of 5.794 percent and matures in June 2053, the UAE’s state-run Wam news agency reported. In December 2020 the consortium had reached a financial close on the project.

The 2GW Al Dhafra plant is 30km south of Abu Dhabi city. It is one of the world’s largest single-site solar photovoltaic (PV) plants having begun operations in 2023. It features almost 4 million solar panels, which deploy bi-facial technology to maximise energy yield.

“After more than two years of full commercial operations, Al Dhafra solar PV power plant’s bonds’ issuance has been certified as a 100 percent green asset, testament to its current operational track record and projected future performance,” Farid Al Awlaqi, CEO of Taqa’s generation business, said.

The plant is expected to save 2.4 million metric tonnes of carbon dioxide from being released annually. This issuance “further reinforces Abu Dhabi’s commitment to the wider energy transition strategy”, Al Awlaqi said. 

Further reading:

• Taqa gets funding for $980m Al Dhafra power plant
• UAE opens world’s largest single-site solar plant
• Abu Dhabi invites companies for greenfield solar project

Ahmed Ali Alshamsi, CEO of Ewec, said that bringing fixed-income investors into the power sector in Abu Dhabi secures competitive long-term capital and redeploys financial capital for future solar PV projects.

Earlier this month S&P Global Ratings assigned its preliminary ‘A’ long-term rating to the green bonds.

A stable outlook was assigned, reflecting expected, predictable and resilient cash flows under the 35-year fixed-tariff power purchase agreement with Ewec.