EWEC, ACWA Power announce financial closing of world’s largest RO desalination project

The financing package contains both commercial and Islamic facilities from a group of leading regional and international financial institutions

Taweelah, Desalina, ACWA Power, Hogan Lovells

Emirates Water and Electricity Company, EWEC, a subsidiary of Abu Dhabi Power Corporation, ADPower, and Saudi Arabia's ACWA Power have announced the successful financial closing of the world’s largest reverse osmosis desalination plant.

The new plant will be located at the Taweelah power and water desalination complex in Abu Dhabi, with completion expected in 2022. ADPower and Mubadala Investment Company hold a 60% equity interest in the Taweelah project while ACWA Power holds the remaining 40%.

The project is to cost AED3.19 billion, with funding sourced from a combination of senior project finance loans worth a total of AED2.71 billion, in addition to equity contributions from shareholders and operating cashflow from pre-operations.

The Taweelah plant’s loan structure is a "Soft Mini Perm", with an expected refinancing period of a maximum three years starting after the commencement of the Taweelah project’s commercial operations, the two companies said in a statement.

Loans (including conventional and Islamic tranches) have been arranged by a group of local and international banks including: Emirates NBD, Natixis, Mizuho Bank, Siemens Bank, Bank Boubyan and The Norinchukin Bank. Natixis is the Agent Bank.

Othman Al Ali, CEO of EWEC, said, "We are delighted to announce that our financial targets have been met and that this new initiative can now get underway. This financial structure is testament to the world-class quality of the plant, which will pave the way for future developments that will contribute to a more efficient and sustainable water and energy sector in the country. This reverse osmosis desalination plant supports the UAE’s vision in reducing carbon dioxide emissions, while significantly reducing gas consumption by decoupling power and water production for the winter and summer seasons."

Mohammad Abunayyan, Chairman of ACWA Power, added, "Achieving such a strategic milestone at this stage in our relationship with EWEC is a sure indicator of the type of success we can expect from this project. The financial closing of the Al Taweelah plant with renowned institutions was made possible by our cooperation, the scale and impact of this project and the future growth and development we anticipate in the UAE. We are truly delighted to play a role in the Independent Water Producers program (IWP) launched by EWEC helping secure the water needs for its communities."

The Taweelah plant will set new benchmarks for its size, efficiency and cost of water produced. Supplying 909,200 m3/day, it will be 44 percent larger than the world’s current largest reverse osmosis plant of 624,000 m3/day. The desalination facility is sufficient to meet the water demand for over 350,000 households. A major driver for the adoption of reverse osmosis instead of thermal desalination is the higher energy efficiency it offers

Hogan Lovells advised ACWA Power ("ACWA") on the project financing of the Taweelah desalination Independent Water Project ("IWP") in Abu Dhabi, United Arab Emirates. Financial close was achieved on 16 October 2019.

The Taweelah desalination IWP will be developed on a build, own and operate (BOO) basis and have a production capacity of 200 million gallons per day (MIGD) of potable water, making it the largest reverse osmosis desalination plant in the world. ACWA Power, AD Power and MDC Power each hold respective equity stakes of 40%, 20% and 40% in the project company.

The financing package contains both commercial and Islamic facilities from a group of leading regional and international financial institutions.

The Hogan Lovells team was led by Dubai-based projects partner Sohail Barkatali, with support from Rahail Ali (Partner, Dubai), Imran Mufti (Partner, Dubai), Alex Wong (Partner, Singapore), Tony Nicholson (Senior Associate, Dubai), Shaakir Daud (Associate, Dubai) and Zack Lin (Associate, Singapore).

Hogan Lovells' Dubai team is also currently advising on other ground-breaking energy and natural resources projects and financings, not only in in the United Arab Emirates, but across the wider Middle East region.  Hogan Lovells recently advised lenders to the winning bidder on the Sakaka solar PV IPP transaction in the Kingdom of Saudi Arabia and advised the successful bidder on the Sharqiyah IWP project in the Sultanate of Oman.  Hogan Lovells is supporting bidders across a number of transactions in the region.


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