Developers have been given until 30 June to submit bids for the Shuweihat 3 independent power project (IPP) in Abu Dhabi, according to official documents shown to MEED.
Abu Dhabi Water & Electricity Authority (Adwea) plans to issue a formal request for proposals on 3 March for the 1,600MW plant. It should start producing its first power by mid-2013.
Ahead of the submission of bids, developers are due to submit expressions of interest later in February, followed by prequalification documents by 25 February.
Once the bids are in, Adwea expects to shortlist bidders on 29 July and sign the power and water purchase agreement with the winning developer on 11 November. Financial close is targeted for 14 April 2011.
The winning bidder will take a 40 per cent stake in a special purpose vehicle, which will be set up to own the project. Adwea will hold the remaining 60 per cent through a subsidiary. The authority envisages that a proportion of the subsidiary’s shares will be sold to local investors in an initial public offering at a later stage.
The power plant is scheduled to begin producing power between April and July, 2013. Full commercial operation is due to start by 31 October 2013.
The developer will sell all of the plant’s output to Abu Dhabi Water & Electricity Company (Adwec) under a 25-year power purchase agreement. Some of Adwec’s payments will be guaranteed by the Abu Dhabi government.
The plant will run on natural gas, to be procured by Adwec and delivered to the developer for free.
Adwea now aims to appoint a financial adviser for Shuweihat 3 and another upcoming scheme, the Taweelah C independent water and power plant (IWPP). Banks, including the UK’s HSBC and France’s BNP Paribas submitted bids for this contract on 26 January.
The Shuweihat 3 project is Adwea’s first ever standalone IPP. The authority has previously tendered eight IWPPs. These were financed through $3.2bn of equity from investors and $11.8bn of debt.