Abu Dhabi invites developers for private power scheme

12 August 2012

Independent water and power project to have about 1,650MW power and 52.5 million gallons a day of water capacity

Abu Dhabi Water and Electricity Authority (Adwea) has issued a request for qualification to developers to build an independent water and power project (IWPP) at Mirfa.

The winning bidder will take a 40 per cent stake in a special purpose vehicle (SPV) for the IWPP, which will have a capacity of 1,500MW of power and 53 million gallons a day (g/d) of water. Adwea will hold a 60 per cent stake in the project.

The project will comprise several parts. The developer will own, develop, finance, construct, operate and maintain a greenfield power plant with a net capacity of 1,100-1,250MW together with a 30 million g/d reverse osmosis desalination plant. It is due for completion by 31 March 2016.

In addition to the greenfield work, the developer will be responsible for taking over certain existing assets of Mirfa Power Company. It will acquire the existing assets at Mirfa and leaseback the assets to the SPV until 17 October 2014, when the transferred assets will be taken offline for integration into the new Mirfa power plant.

The developer will install four PG9171E open-cycle gas turbines packages from the US’ GE, each with a capacity of about 100MW. Federal Electricity and Water Authority (Fewa) purchased the turbines from GE in February 2005 before they were transported to Mirfa in 2009.

The SPV will be responsible for integrating three 7.5 million g/d desalination units, which were installed by Italy’s Fisia Italimpianti, into the new plant. The existing open-cycle gas turbine units and reverse-osmosis plant will be required to be ready for operation by 15 July 2015.

Mirfa is about 120 kilometres from Abu Dhabi. It will be built within Adwea’s existing power and desalination complex. Adwea is responsible for decommissioning and demolishing its existing assets at the Mirfa site. Power from the project will be bought by Abu Dhabi Water and Electricity Company (Adwec) under a 25-year power and water purchase agreement. Adwec will supply the project with gas feedstock.

Statements of qualification will be submitted by 10 September. Bids will be submitted by 15 February 2013 and will be followed by a shortlist of bids by 14 March 2013. Power and water purchase agreements will be signed by 15 September 2013 and financing is scheduled to be closed by 14 November 2013.

Most of the power is expected to be commissioned by summer 2015. The schedule is driven by Adwec’s expectation that power demand will increase by 11.3 per cent a year between 2011 and 2015, and by 13.6 per cent a year once electricity exports are included.

The increase will be driven primarily by the anticipated increase in power needs from Abu Dhabi National Oil Company (Adnoc) and electricity exports to the UAE’s northern emirates, which will together account for two-thirds of demand growth up to 2015. Abu Dhabi’s water needs are also growing and are expected to double between 2011 and 2030.

Before selecting the Mirfa site, Adwea had considered building the project at Taweelah. It also considered a site in the UAE’s northern emirates for its next IWPP. “The Mirfa site has a number of advantages for the rehabilitation and upgrading of the plants capacity including the strategic location between the high demand areas of Tarif and Liwa, as well as the nitrogen gas plant currently under construction through Adnoc that will require approximately 200MW of power,” says Adwea director general, Abdulla Saif al-Nuaimi, speaking about the site selection.

The decision to use reverse osmosis for the desalination component of the project is significant and was driven by the expectation that nuclear power will be introduced to the network from 2018. “The project offers flexibility to Abu Dhabi’s generation and desalination system in the future through the implementation of reverse-osmosis technology, particularly when nuclear is expected to come online,” says Al-Nuaimi.

Adwea is advised by the UK’s HSBC, US law firm White & Case and Germany’s Fichtner for Mirfa IWPP. This is Abu Dhabi’s tenth independent project. Abu Dhabi has eight IWPPs, of which four were assets sales, and one independent power project (IPP) that are currently under construction or in operation.

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