Kahramaa announces successful financial closure of Siraj-1 power project
July 22 2020 07:50 PM
Kahramaa announces successful financial closure of Siraj-1 power project
Kahramaa announces successful financial closure of Siraj-1 power project

QNA Doha

Qatar General Electricity and Water Corp (Kahramaa) has announced the successful financial closure and completion of all financial arrangements with the international financers who were involved in the Siraj-1 solar power plant project, the first of its kind in Qatar to produce electricity using photovoltaic technology with a capacity of 800MW.

The projects company (Siraj-1 Company) has obtained the senior loans, which had been provided by Japan Bank for International Cooperation (JBIC) and Mizuho Corporate Bank.

After the projects financial closure, the levelised electricity cost (LEC) was set at Dh5.281 (1.449 US cents) per KW/h, which is the lowest price in the world for this type of projects. Achieving this competitive pricing is evidence for the trust of the investors and developers in Qatari market as well as implementing the latest and most innovative engineering solutions to build and operate the solar plant, according to a statement.

Last January, Kahramaa signed the agreements of Siraj-1 plant. According to the agreements, Kahramaa - the owner and operator of the transmission and distribution system of electricity and water in Qatar - will purchase electricity produced from the plant, while Siraj-1 must construct and operate the project.

Siraj-1 Company is owned by Siraj Energy (60%) and a consortium of Japan’s Marubeni Corp and France’s Total Solar International (40%). The project will be constructed, owned and operated for 25 years. Then, the assets will be transferred to Kahramaa complying with the “build, own, operate, and transfer (BOOT) model.

The QR1.7bn project will be constructed on a 10 square kilometer land plot in the Al Kharsaah area west of Doha that has been allocated to Kahramaa in accordance to the Amiri Decree No (19) of 2018.

The plant will have a total capacity of 800MW which equals about 10% of Qatar’s current peak electricity demand. Some 350MW will be linked to the grid in the first phase in the second quarter of 2021. The commercial commissioning of the total capacity will be in the first quarter of 2022 in order to achieve the objectives of the National Strategic Development 2018-2022.

Kahramaa, through this project, has succeeded in obtaining a competitive price of the electricity produced. It also succeeded in reducing reliance on natural gas, reducing emissions and protecting the environment. The plant contributes to reducing around 26mn tonnes of emissions during the project period and will support Qatar’s commitment to hosting a carbon-neutral FIFA World Cup. This also comes in line with one of the objectives of the National Programme for Conservation and Energy Efficiency “Tarsheed", represented in reducing at least 1mn tonnes of emissions annually until 2022.

Kahramaa had announced the public bid to set up the plant in early 2019. It prequalified 16 international leading companies in the field of constructing and developing solar energy plants. It received five competitive offers from global companies; this level of participation is evidence of the strength and attractiveness of the Qatari market. Kahramaa was advised by a consortium of consultants led by Ernst & Young as financial consultant; DLA Piper as legal consultant and Poyry as technical consultant.

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