Dubai Electricity and Water Authority (Dewa) is due to issue the request for expressions of interest in mid-March for its first private power plant. The utility aims to launch the request for proposals in April.
Dewa could then name a preferred bidder for the scheme, the first independent power project (IPP) in the emirate, by November and reach financial close in early 2012.
The firm was currently asking the Dubai government to agree to provide a guarantee on project, said Fatima al-Shamsi, senior manager of new business development at Dewa, on the sidelines of the MEED Project Finance Conference 2011.
“We are discussing with the government about providing a guarantee for the project, and it is being positively considered,” said Al-Shamsi.
She added that Dewa would hold a 51 per cent stake in the project, part of which could be floated on the local stock market in the future. “There is a provision for Dewa to list a minority stake in the project, but there has been no firm decision as yet,” she said. The company will also consider listing stakes in existing power plants, although al-Shamsi said Dewa was currently focusing on the development of new projects and has made no final decision selling stakes in its existing assets.
The power purchase agreement (PPA) for the project is already being drafted, according to al-Shamsi, and will have a duration of 25 years, with Dewa as the offtaker and as transmission company.
Dewa’s first IPP will have a gas feedstock and will be developed at Hassyan, close to the Abu Dhabi border, and Al-Shamsi says the site can handle up to six projects. Dubai is also looking at developing a clean coal project, which could also be built at the Hassyan site, although other locations will be considered.
Dewa is being advised on the Hassyan scheme by the UK’s HSBC, Clifford Chance, and Mott MacDonald. Part of their wok has included setting up a legal framework for future independent power projects to be developed in the emirate.