UAE-based clean energy developer Masdar has completed financial closure of a $5.1-billion financing package for a groundbreaking renewable energy project located in Abu Dhabi, which will provide continuous clean electricity by using a mix of large-scale solar generation and battery energy storage. The project, in partnership with Emirates Water and Electricity Company (EWEC), is slated to become one of the world's largest renewable energy and storage complex. The development is viewed as one major step towards the success of renewable energy, solar power, battery energy storage, clean energy and Abu Dhabi.

The project is estimated to cost $6.1 billion, of which $1 billion is being provided by Masdar as equity investment and the remaining funds are expected to come from a group of international and regional financial institutions through debt financing. The project is the world's first gigascale solar renewables project – a combination of solar PV generation alongside one of the world's largest battery energy storage projects – to deliver 24/7, utility-scale clean power, the company said.

Integrating LSS and Batteries at Large Scale

The project will consist of a 5.2 GW solar photovoltaic (PV) plant and a 19 gigawatt-hour (GWh) battery energy storage system (BESS), Masdar said. This combination will allow the facility to provide 1 GW of continuous base-load clean electricity, which is one of the challenges faced with renewable generation – ensuring power can be generated outside daylight hours.

The large battery storage system will store excess solar energy produced during the day and will release it when energy demand persists after the sun has set or when the sun isn't producing as much energy. This integrated solution is supposed to guarantee a secure and stable energy supply in renewable form, and decrease dependence on the energy production from fossil fuels.

The development is considered as the world's first gigascale renewable energy project focussed on providing steady and constant clean energy, representing the increasing importance of energy storage technologies for grid reliability and energy transition initiatives, Masdar said.

The Consortium of Global and Regional Banks has provided Financing.

The financing package is made up of 13 international and local banks, thus indicating wide financial sector involvement in large-scale renewable infrastructure.

The financial institutions that will participate are Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank, BNP Paribas, Bank of China, Crédit Agricole Corporate and Investment Bank, Dubai Islamic Bank, First Abu Dhabi Bank, HSBC, KfW IPEX-Bank, Natixis, Sumitomo Mitsui Banking Corporation, Standard Chartered and Societe Generale.

The presence of several different lenders indicates continued investor demand for energy storage projects that are paired with power generation, typically in the utility-scale sector. These financing mechanisms are becoming more significant as governments and developers are looking to drive the deployment of clean energy, while providing a stable electricity supply.

The project to strengthen energy security has begun.The project to strengthen energy security has started.

The Abu Dhabi-based project will be a major component of the UAE's clean energy goals, helping to diversify the nation's energy supply and diversify the region's economy. This capability would also help to enhance energy security and stability of the energy grid, and decrease carbon emissions from energy generation, as opposed to relying on non-renewable sources for energy supply.

The deployment of battery energy storage systems is seen as a vital asset to future power systems as they help to balance electricity supply and demand, integrate variable renewable energy sources and increase the overall network resilience. High capacity solar generation coupled with large scale storage is anticipated to provide a blueprint for future renewable energy projects in areas where reliable low carbon energy is desired.

Masdar Highlights Financial Milestone

The financial close, said Mazin Khan, Chief Financial Officer at Masdar, reflects the international banking community's trust in the project and Masdar's long-term vision.

He said the financing agreement was a sign of confidence in Masdar's financial strength, disciplined project execution and long-term growth plans. The milestone is also a testament to the company's ability to raise global capital for large-scale renewable infrastructure investment and to contribute to long-term economic growth and energy security, Khan added.

The financial closing is an important milestone towards construction and implementation of the project and the integrated solar and battery storage system will be one of the largest investments in renewable energy in the region. The continued growth of renewable energy generation and the importance of reliable power supplies in countries means that utility scale solar generation with advanced battery storage are likely to be increasingly important in the energy transition globally.