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Clean Middle East Magazine
Shams 1 solar project secures financial close
Dated: 05-04-2011

Shams Power Company announced the financial close of Shams 1, one of the world’s largest concentrated solar power (CSP) projects and the first of its kind in the Middle East. The US$600 million closing marks the largest solar project transaction to date and combines financing from 10 regional and international lenders.

Demonstrating strong interest from lenders, the financing – a non-recourse 22-year door-todoor fully amortizing structure – was oversubscribed with commitments totalling more than US$900 million. Shams 1 lenders included BNP Paribas, KfW, Mizuho, National Bank of Abu Dhabi, Natixis, Société Générale, Sumitomo Mitsui Banking Corporation, The Bank of Toyko-Mitsubishi, Union National Bank and WestLB , with which BNP Paribas were the financial advisors.

The dynamic deal team was able to leverage knowledge across the sponsor group resulting in an innovative  structuring and a ground-breaking financing for a landmark deal. The joint venture between Masdar (60%), Total (20%) and Abengoa (20%) will develop, build, operate and maintain the plant which will be located in Madinat Zayed, approximately 120 kilometres southwest of Abu Dhabi. In addition to the strong solar irradiation in the area, the location was chosen to supplement ongoing efforts to develop the western region of Abu Dhabi by providing renewable power, as well as new jobs and a strengthened economy.As one of Masdar’s flagship projects, Shams 1 will directly contribute toward Abu Dhabi’s target of achieving seven percent renewable energy power generation capacity by the year 2020. Shams 1 is a milestone project for the region and will be a core contributor to Abu Dhabi’s long-term renewable energy objectives.

As the first utility scale, commercial solar power project in the Middle East, Shams 1 represents the realization of the vision that the Abu Dhabi leadership has for renewable energy in the emirate and was recently awarded the “Middle East Renewables Deal of theYear 2010” by Project Finance. Based on Abengoa’s concentrated solar power
(CSP) technology, the Shams 1 technology is unique – a result of a strong technical cooperation between Masdar, Total and Abengoa. Different from photovoltaic (PV) solar power, CSP technology generates solar thermal electricity by focusing sunlight, concentrated by mirrors, to heat a coolant which then generates high-pressure steam that drives
a conventional steam turbine, resulting in an efficient, reliable and clean solution. Conversely, PV solar technology generates power by converting solar radiation into direct current electricity when the energy of sunlight is absorbed by a solar panel and transferred to a semiconductor. Shams 1 will be one of the largest concentrated solar power plants in the world, extending over an area of 2.5 km², with a capacity of approximately 100 MW and a solar field consisting of 768 parabolic trough collectors. Construction began during Q3 2010 and is expected to be completed in approximately two years.

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