Abu Dhabi's Masdar, France's Total S.A. (TOT) and Spain's Abengoa Solar (ABG.MC) are on track to start operations of a 100-megawatt concentrated solar power, or CSP, plant in the Gulf emirate in the third quarter of 2012, an Abengoa executive said Wednesday.

"It's on schedule," Michael Geyer, Abenqgoa Solar's director of international business development, said at the World Future Energy Summit in the U.A.E. capital.

Masdar, which is tasked with developing Abu Dhabi's renewable energy sector, in June last year appointed Abengoa and Total as partners on the Shams 1 project, which requires $600 million in capital expenditure. Abengoa and Total each own 20% in the project, with Masdar holding the remainder.

"When it's connected to the grid next year, it will be the largest [CSP] plant in the world," Geyer said.

Masdar and its partners were looking to seal a $600 million bank loan for the project by the end of last year. The loan deal hasn't yet been completed but will be sealed "soon," Frank Wouters, Masdar's head of power, said Tuesday.

Shams 1, set to be the first utility-scale, commercial solar power project in the United Arab Emirates , will have enough capacity to supply electricity to 20,000 households.

Abu Dhabi, the largest of seven emirates that make up the U.A.E. and producer of almost all the country's crude oil, has a target to generate 7% of its power capacity from renewables by 2020.

The Shams 1 plant is being built under the independent water and power producer, or IWPP, model that Abu Dhabi already uses for conventional power generation and water desalination schemes.

Under the model, the project company will sell power to state utility Abu Dhabi Water and Electricity Co., or Adwec, under a power purchase agreement. Abu Dhabi 's government will pay a "green tariff" to compensate Adwec for the difference between average domestic power generation cost and generation cost for the CSP project.
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