Kahramaa Announces Successful Financial Closure of Siraj-1 Power Project
Qatar General Electricity and Water Corp (Kahramaa) has announced the successful financial closure and completion of all financial arrangements with the international financiers 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 project’s company (Siraj-1 Company) has obtained the senior loans, which had been provided by ‘Japan Bank for International Cooperation’ (JBIC) and ‘Mizuho Corporate Bank’ to finance the plant.
After the project’s financial close, the Levelized Electricity Cost (LEC) was set at 5.281 Dirham (1.449 US cents) per KW/h, which is the lowest price in the world for these types of projects. Achieving this competitive price 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.
Last January, Kahramaa had signed the agreements of Siraj-1 large-scale solar power plant to produce electricity using photovoltaic technology. According to the agreements, KAHRAMAA, which is the owner and operator of the transmission and distribution system of electricity and water in Qatar, will purchase the electrical energy 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 Corporation 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 according to the system of Build, Own, Operate, and Transfer (BOOT) that is known globally, committed to the principle of public and private partnerships as well as to encourage foreign investments in major projects.
The project will be constructed with a total cost of 1,7 billion Qatari Riyal at a 10 square kilometre land plot in Al Kharsaah area west of Doha that has been allocated for Kahramaa, in accordance to the Amiri Decree no (19) for the year 2018.
The plant will have a total capacity of 800 MW which equals about 10% of Qatar’s current peak electricity demand. 350 MW will be linked to the grid as a first phase in the second quarter of 2021. The commercial commissioning for the total capacity will be in first quarter of 2022 in order to achieve the announced strategic objective of National Strategic Development 2018-2022.
Kahramaa, through this project, has succeeded in obtaining a competitive price of the produced electricity. It had also succeeded in reducing reliance on natural gas, saving the natural gas used in traditional production, reducing emissions and enhancing the surrounding environment. The plant contributes in reducing around 26 million tonnes of emissions during the project period and will support Qatar’s commitment to host a carbon-neutral FIFA World Cup. This also comes in line with one of the objectives of the National Program for Conservation and Energy Efficiency ‘Tarsheed’, represented in reducing at least one million tonnes of emissions annually until 2022.
It is worth mentioning that Kahramaa announced the public bid to establish the first large solar energy plant for electricity production using the photovoltaic technology in the State of Qatar in early 2019. The project attracted companies that have experience in the field of developing solar energy plants, and KAHRAMAA had prequalified 16 international leading companies in the field of constructing and developing solar energy plants. It received five competitive offers from alliances and global companies, and 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 a financial consultant, DLA Piper as a legal consultant and Poyry as a technical consultant.