Taweelah IWP gets “sustainable loan” qualification for desalination project

ACWA Power and Natixis have announced that the Taweelah IWP has obtained the first-ever “sustainable loan” qualification for a water desalination project globally.

The tariff offered by ACWA Power for the Al Taweelah IWP was the lowest achieved to date in the world for desalinated water.

Closed in September 2019, this US$758 million (S$1.1 billion) project finance loan, with a contractual tenor of 32.4 years, will finance what can become the largest reverse osmosis plant in the world when completed in 2022.

Vigeo Eiris, which provided an independent second party opinion on the sustainability credentials and management of this project finance loan, confirmed that it is aligned with the four components of both the Green Loan Principles (published by the LMA in 2018) and the Social Bond Principles (published by the ICMA in 2018, and used in this case in the absence of published Social Loan Principles).

Natixis acted as initial mandated lead arranger, documentation bank, hedge provider, global facility agent and sustainable loan coordinator. Natixis acted as sole arranger and investment agent under the Islamic Equity Bridge Loan for ACWA Power’s equity portion.

This project finance loan is dedicated to the financing of the design, construction, operation and maintenance of a 200 million imperial gallons per day reserve osmosis plant and associated infrastructure and facilities. The plant will be constructed in the existing Taweelah complex, in Abu Dhabi, UAE. The project includes a 68MW peak photovoltaic power plant to complement the energy supply from the procurer’s grid.

ACWA Power is the lead developer and operator of the project and a 40% shareholder, with the remaining 60% contributed by the government of Abu Dhabi through Abu Dhabi Power Corporation and Mubadala Development Company. Emirates Water & Electricity Company (EWEC), a fully-owned entity of the government of Abu Dhabi and the water and power supplier of the region, is the sole offtaker of the project under a 30-year contract.

The tariff offered by ACWA Power for the Al Taweelah IWP was the lowest achieved to date in the world for desalinated water. The project, when constructed, is expected to set another world record by utilising the lowest amount of energy per gallon of desalinated water produced. The plant will play a vital role in catering to Abu Dhabi’s peak water demand, which is expected to rise by 11% between 2017 and 2024.