Abu Dhabi National Energy Company (TAQA) and Japanese trading house Marubeni have reached financial closing on the largest-ever gas-fired power plant in the United Arab Emirates.
The Fujairah F3 independent power producer (IPP) project will have a generation capacity of 2,400 megawatts (MW), the equivalent capacity to power 380,000 households. It is expected to begin early power generation by summer 2022, with full generation expected by summer 2023.
TAQA and Mubadala Investment will jointly hold a 60% equity interest in the project, with 40% held by Marubeni. Total project cost is estimated at 4.2 billion UAE dirham (US$1.14 billion).
Debt has been sourced from a consortium of international multilateral and commercial banks, including the Japan Bank for International Co-operation (JBIC), BNP Paribas Fortis SA, Mizuho Bank, Sumitomo Mitsui Banking, Sumitomo Mitsui Trust Bank, and Standard Chartered Bank.
JBIC will provide project financing amounting to US$470 million, alongside the commercial banks, under its growth investment facility. The total co-financing amount is US$941 million.
Under JBIC‘s export strategy for infrastructure system, which was revised in June 2019, the Japanese government expressed its intention to promote orders for infrastructure systems. And the government, in its strategic energy plan released in July 2018, calls for the strengthening of the international competitiveness and overseas expansion of the energy industry by promoting Japanese companies, with support from policy-based financial institutions.
JBIC says its loan is in line with these government policies as the loan will contribute to Japanese industry maintaining and enhancing its international competitiveness.
The Fujairah F3 plant will be located in the Qidfa area of the emirate of Fujairah, close to the existing Fujairah F1 and Fujairah F2 water and electricity plants.
Fujairah F3 is designed as a mid-merit dispatch plant, rather than for continuous base load. During peak load, the plant uses 40% less natural gas than other gas-fired power plants. The plant will incorporate state-of-the-art gas turbine technology from Mitsubishi Heavy Power Systems and will utilise the most efficient combined-cycle technology in the region.
“The financial close of this project is a major milestone that allows us to move forward with construction of Fujairah F3", comments Othman Al Ali, chief executive officer of Emirates Water and Electricity Company (EWEC). "The financial terms of this highly efficient plant are amongst the most competitive seen in Abu Dhabi to date."
EWEC is a leading company in the co-ordination, planning, and supply of water and electricity across the United Arab Emirates. It has a role as the sole procurer of water and electricity from independent producers. EWEC is part of ADQ, one of the region’s largest holding companies with a diverse portfolio of major enterprises spanning key sectors of Abu Dhabi’s non-oil economy. It has signed a 25-year power purchase agreement with the project.
“The Fujairah F3 project is a landmark for TAQA and its generation assets, following the company’s integration with ADPower. It will be the largest gas-fired power plant in the UAE, and, by utilising advanced combined-cycle technologies, it will be one of the most efficient in the region”, says Farid Al Awlaqi, the newly appointed executive director of generation at TAQA.
On 1 July, Abu Dhabi National Energy Company (TAQA) completed a transaction with Abu Dhabi Power Corporation (ADPower) under which ADPower transfered the majority of its power and water generation, transmission, and distribution assets to TAQA in exchange for 106,367,950,000 new shares.
The deal has created one of the largest utility companies in the Europe, Middle East and Africa (EMEA) region. TAQA, which is listed on the Abu Dhabi Securities Exchange, is now the UAE’s third-largest publicly traded company by market capitalisation.
“Fujairah F3 is our sixth I(W)PP project in the UAE, a reflection of our commitment to supporting a sustainable energy sector that offers reliable and environmentally friendly sources of power. This project will deliver operational flexibility and state-of-the-art efficiency to reinforce the security of supply and support the integration of zero-carbon power-generation assets", says Satoru Harada, chief operating officer of Marubeni’s power business division.
Marubeni will add the new project to its existing five for the emirate of Abu Dhabi –Taweelah B IWPP, Fujairah F2 IWPP, Taweelah A2 IWPP, Shuweihat S2 IWPP, and Sweihan PV IPP.
Mubadala Investment is a sovereign investor managing a global portfolio on behalf of the government of Abu Dhabi. Mubadala’s US$229 billion portfolio spans five continents with interests in multiple sectors and across all asset classes.
