ICBC provides $150 million equity bridge loan for 200MW Noor II CSP Independent Power Project

In 2018, the Dubai Branch of Industrial and Commercial Bank of China (ICBC) signed a $150 million equity bridge loan (EBL) agreement with ACWA Power Ouarzazate II S.A. (“APO II”) — a special purpose vehicle and joint venture of ACWA Power Bahrain Holdings (70% equity stake), SENER Group (5% equity stake), and Masen Capital (25% equity stake)— for the 200MW Noor II CSP Independent Power Project. The borrowing terms of this ICBC loan are unknown. The total cost of the Noor II CSP Independent Power Project (IPP) was EUR 834.5 million. The project was implemented on a public-private partnership (PPP) basis) and co-financed by the Government of Morocco, the World Bank, the African Development Bank, European Investment Bank (EIB), KFW, the Clean Technology Fund (CTF), and various private sector sponsors. It was the second in a series of projects at the Ouarzazate solar complex. The Noor II CSP IPP was based on the parabolic trough CSP technology with a capacity of 200 MW and 7 hours of storage developed on a BOO basis. The solar power plant comprises a solar field, a turbine and a thermal power-storage facility. Shandong Electric Power Construction Co., Ltd (SEPCO III), a subsidiary of Power Construction Corporation of China, was the contractor responsible for project implementation. Construction began in May 2015 and the power plant was put into commercial operation on April 24, 2018. The initial commercial operation date (ICOD) of the power plant was contractually set at August 27, 2017 but could not be met due to delays affecting the project and the force majeure claimed by APO II, and was thus extended by 160 days to February 3, 2018, considered the new required initial commercial operation date (RICOD) of the NOOR Ouarzazate II power plant. It should also be noted that following the suspension of land transportation authorisations for exceptional convoys (heavy equipment) due to significant damage caused to several structures by severe weather on October 26, 2016, the delivery of heavy equipment, initially scheduled for November 2016, was delayed and was made only at the end of May 2017. As a result of the suspension of land transportation, APO II requested additional 187 days because of the force majeure. The initial commercial operation date (ICOD) of the NOOR Ouarzazate II power plant, initially set at August 27, 2017, could not be met due to several factors, some of which have been listed above (difficulties in transportation and logistics). It was postponed, after MASEN accepted the force majeure claimed by APO II, to February 3, 2018 considered as the new required initial commercial operation date (RICOD) for the power plant. The first synchronisation of the plant to the power grid was conducted on January 10, 2018. The plant's initial commercial operation date was April 24, 2018, following successful completion of performance and reliability tests conducted in March 2018 and 24 April 2018 when the thermal energy storage system started working again. Some conditions were waived, such as certain atmospheric emissions and noise tests (these tests were successfully completed on September 26, 2018 and September 29, 2018). The Initial Commercial Operation Certificate, which confirmed completion of the initial commercial operation date (ICOD) of NOOR Ouarzazate II on April 24, 2018, was issued by the Project Company on September 18, 2018. The ICOD Agreement defining the terms of the ICOD declaration was signed on December 27, 2018. The power plant experienced a partial outage in January 2020 related to a turbine outage and again for 18 days in June and July 2020 as a result of leakage in its steam generator system, with further inspections and repairs of the steam generator system in November 2020 resulting in lower availability in 2020 with net dispatch of 506,535 MWh versus the plan of 660,890 MWh.

Additional details

1. This project is also known as the Noor Ouarzazate Solar Power Project Phase II and the 200 MW Noor II CSP IPP. The French project title is Projet de complexe solaire de Ouarzazate – Phase II. 2. A bridge loan is a special short-term facility mainly used to cover the short-term funding gap of the borrower and to bridge the funding to meet the conditions of long-term facilities. ICBC is not listed in the list of the original long-term creditors for the Noor Ouarzazate Solar Power Project Phase II. By the end of 2018, the ICBC had devoted an equivalent of $9.41 billion to finance Eligible Green Assets; and 1.4% of the fund was allocated to Morocco for this project ($131,740,000). 3. The project’s offtaker is MASEN, with whom APO II entered into a 25 year power purchase agreement in the presence of Office National de l’Électricité et de l’Eau Potable (“ONEE”). 4. The PPP agreement between MASEN and APO II for the design, financing, construction, operation and maintenance of the NOOR Ouarzazate II power plant for a 25-year period provided for commissioning after 25 months as from 27 July 2015 (date on which the contract effectiveness was notified).

Number of official sources

12

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20