The formation of the utility marks the start of the final stages of contractual negotiations between the bidding consortium and WEC, which will culminate in the signing of a 20-year power and water purchase agreement (PWPA). ‘There are just a few issues that need to be thrashed out,’ says a project source. ‘We expect everything, including project financing, to be finalised soon.’

Under the terms of its mandate, SWEC will develop and operate the 900-MW, 176 million-gallon-a-day IWPP on a build-own-operate (BOO) basis. Commissioning is expected in 2007.

The bidding consortium, in which Acwapower, Tenaga and Malakoff hold 50 per cent, 30 per cent and 20 per cent stakes respectively, will buy into SWEC once financial close is reached. The company’s final shareholding composition will see the developer group take a 60 per cent stake, with the remaining 40 per cent split between the Public Investment Fund (PIF), with 32 per cent, and SEC, with 8 per cent.

The local/Malaysian group has as its nominated EPC contractors Germany’s Siemensfor the power and South Korea’s Doosan Heavy Industries & Construction Companyfor the desalination. Its bid is supported by a bank group of ABN Amro, Arab Bank, Riyad Bank, Saudi Hollandi Bankand Export-Import Bank of Korea.