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The signing of the Shams 1 solar power project financing in the UAE last month has opened the way for a burgeoning in renewable energy in the Gulf, said Standard & Poor's Ratings Services in a new report.
S&P believe that renewable energy projects are likely to gain momentum in the Gulf after this transaction successfully closed, and they expect the GCC to invest about US$100 billion over the next 10 years to increase power capacity.
"We believe the Shams 1 project marks the start of a potential new industry in renewable energy in the Gulf Cooperation Council region, where renewables currently only represent less than 1 per cent of the total energy mix," said Standard & Poor's credit analyst Karim Nassif.
Three companies, France's Total S.A., Spain's Abengoa S.A., and Abu Dhabi-based Masdar gained a US$600mn bank loan to build the solar plant, named Shams 1, which will have a 100-megawatt capacity and would qualify for carbon credits under the United Nation's Clean Development Mechanism (CDM).