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Masdar gets solar plant financing

Masdar succeeded in getting US$615mn in financing from banks for the worlds biggest concentrated solar power plant (CSP).

Eight foreign banks and two local banks underwrote the 22-year deal that was recently signed. US$153mn of the equity will come from its Spanish and French partners.

The US$600mn plant which is named Shams 1 will be built by Masdar in conjunction with France's Total and Spain's Abengoa. The plant will have a 100MW capacity and would qualify for carbon credits under the united nation's clean development mechanism (CDM).

Masdar will have a 60 per cent stake in Shams power company, while the European partners hold 20 per cent each. Lenders showed strong interest in the financing due to the project's attractiveness and this was the reason why the financing was over-subscribed with commitments totalling US$900mn, Masdar said in a statement.

National Bank of Abu Dhabi underwrote US$68mn and Union National Bank US$41mn of the financing. Japan's bank of Tokyo-Mitsubishi and Sumitomo, France's Natixis and Societe Generale and Germany's KFW and West IB have each underwritten US$68mn.

Other banks in the deal are BNP Paribas and Mizuho. BNP Paribas acted as financial advisor. The project is structured as a typical independent power project (IPP) and with a power purchase agreement with Abu Dhabi Water & Electricity (ADEC) in place.

"With this financial close we are going one step forward toward the completion of the middle east's largest solar power plant," said Philippe Boisseau, President, Total Gas & Power.

Construction began in the third quarter of 2010 and is expected to be completed in around two years. Abu Dhabi aims to have seven per cent of its energy from renewable sources by 2020.

Masdar had previously delayed a planned US$2.2bn hydrogen power project and cancelled plans to build a solar module manufacturing facility in Abu Dhabi.