A consortium led by Abu Dhabi Future Energy Company (Masdar) has reached financial close for the third phase of the 800MW Mohammed bin Rashid Al Maktoum solar park in Dubai.

The parties involved call the deal, which involves seven global and regional financial institutions, a “significant milestone” that will pave the way for more Sharia-compliant investment in the renewable energy sector.

The facility is backed by the UAE’s Union National Bank, the Islamic Development Bank, the Arab Petroleum Investments Corporation (Apicorp), Natixis, Siemens Financial Services, Korea Development Bank and Canada’s export credit agency Export Development Canada (EDC).

According to a statement by Masdar, the deal makes it the largest renewable energy project in the Middle East to receive Sharia-compliant financing, one of the fastest-growing segments of the global financial market. The company has not disclosed the size of the facility.

The Masdar consortium includes EDF Energies Nouvelles, a subsidiary of France’s EDF Group, which is developing the project in partnership with Dubai Electricity and Water Authority (DEWA).

Commenting on the news, HE Saeed Mohammed Al Tayer, CEO of DEWA, says the adoption of an Independent Power Producer (IPP) model has generated international interest from global business and energy companies.

“This has been supported by the favourable existing regulatory and legislative frameworks in Dubai that enable public-private partnerships,” he says. “The project has also set a global benchmark in solar tariffs at a price of 2.99 US cents per kilowatt-hour, a world-record-low tariff for solar power generation.”

Mohamed Jameel Al Ramahi, CEO of Masdar, adds: “The financing demonstrates the confidence which the multinational lender community has in this important project, and underlines the compelling business case for renewable energy today. The involvement of Islamic investment in the project financing is especially pleasing, and will pave the way for further Sharia-compliant investment in clean energy.”

The third phase will be operational by 2020. According to Masdar, the plant’s production capacity will reach 5,000MW by 2030, with investments totalling AED50bn. This will lead to a yearly saving of more than 6.5 million tonnes of carbon emissions.