A consortium consisting of ACWA Power and MDC Power Holding Company LLC, an entity fully owned by Mubadala Investment Company PJSC (Mubadala) along with the Federal Electricity & Water Authority (FEWA) has achieved the financial closure for the 150 MIGD Umm Al Quwain Independent Water Project (IWP) in the United Arab Emirates.

The $800 million project is funded on a debt to equity ratio of up to 85/15. A syndicate of seven international and local lenders will provide the $680 million senior debt. The mandated lead entities including Korea Development Bank, MUFG Bank, Siemens Bank, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation, First Abu Dhabi Bank and the Saudi American Bank helped structure the first IWP non-recourse project finance debt for FEWA on a 24.5-year door-to-door tenor.

Paddy Padmanathan, President and CEO of ACWA Power, said: “We are pleased to partner with FEWA and Mubadala on the first IWP infrastructure in Umm Al Quwain. Successfully achieving financial closure at this stage is testament to the readiness of the market for private-public partnerships. It also reflects  ACWA Power’s strong financial standing and reliability as well as the credence we have gained from global and financial institutions that has been developed over years of successful operations and partnerships. This project is another example of our commitment to supply affordable potable water to more people by developing efficient water infrastructure that will cater for the growing demand in the country.”

Rajit Nanda, Chief Investment Officer of ACWA Power, said: “Umm Al Quwain IWP marks a special moment for us, not only because it is the largest desalination project in Northern Emirates but also due to its role in the development of the first IWP non-recourse project financing structure for FEWA that will deliver value for years to come. We are delighted to have shown FEWA that we are a partner of choice through the timely financial close of this project and our contribution to securing cost-effective and energy efficient potable water supply for the Northern Emirates. This project is a strong indicator of how ACWA Power has developed a stronghold in the United Arab Emirates. We look forward to capitalising on this opportunity and supporting the envisioned growth for the country.”

The UAQ IWP is an Independent Water Project (IWP) based on Reverse Osmosis Technology. The plant along with the associated Intake & Outfall facilities shall be developed to produce 150 MIGD (682,000 m³/day) of desalinated water and will be located at a coastal site in the Emirate of Umm Al Quwain along the border of Emirate of Ras Al Khaimah. The Water Purchase Agreement (WPA) with off-taker, Federal Electricity and Water Authority (FEWA), is signed for a 35-year term, and the plant is expected to be commercially operational by July 2022.

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