Sources say consortium aims to secure loan of up to $1.4bn before the end of Q2
A consortium including China's Harbin Electric and Saudi Arabia's ACWA Power aims to secure a loan of up to $1.4 billion before the end of the second quarter to finance a 1,200 megawatt clean coal power plant in Dubai, sources told Reuters.
The companies are in talks about the club loan with Chinese-state owned credit agency Export-Import Bank of China and lenders including Industrial and Commercial Bank of China , Bank of China, Standard Chartered , Abu Dhabi's First Gulf Bank (FGB) and Saudi Arabia's Samba Financial Group, the sources said.
Nobody was available to comment from Harbin Electric, while ACWA Power declined to comment. FGB and Samba Financial Group were not immediately available for comment.
The plant is the first phase of the $1.8 billion Hassyan clean coal project which is being developed by Dubai Electricity and Water Authority (DEWA). One unit of 600 MW is due to be operating by March 2020 and another a year later.
Clean coal plants use technology to slash harmful environmental emissions that otherwise result from burning the fossil fuel.
The loan will help to cover the cost of the entire project, the sources said.
A consortium including Harbin Electric and ACWA Power was announced in October as the preferred bidder to build and operate the plant. Harbin Electric and Alstom of France will build the plant and operate it alongside ACWA Power and U.S.-based NRG Energy.
DEWA will be the major stakeholder, with a 51 percent share in the company established to build and operate the plant, while a large part of the cost will be financed by the consortium.
In October, Paddy Padmanathan, ACWA Power chief executive, said that in addition to a $1.4 billion loan, the consortium will finance a further $200 million from equity. DEWA will finance the remaining $200 million, officials said.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.