Dubai Electricity & Water Authority (Dewa) has prequalified 18 developers to bid for the contract to build and operate the emirate’s first independent power project (IPP).

The following companies have been prequalified:

• Acwa Power (Saudi Arabia)
• Korea Electric Power Company (Kepco)
• GE International (US)
• Malakoff International (Malaysia)
• Marubeni Corporation (Japan)
• Mitsui (Japan)
• Qatar Electric Power Company (Qatar)
• Sembcorp Utilities (Singapore)
• Suez Tractebel (Belgium)
• Sumitomo Corporation (Japan)
• Abu Dhabi National Energy Company (Taqa) (UAE)
• Kharafi National (Kuwait)
• Lanco Infratech (India)
• Oasis International Power (UAE)
• Samsung Engineering (South Korea)
• Sojitz Corporation (Japan)
• Tata Power Company (India)
• United Infrastructure Developers Company (UK)

Several companies have prequalified on the condition that they partner with another company to bid for the project.

Previous independent utility projects in Abu Dhabi and Fujairah have benefitted from significant support from Japan Bank for International Cooperation (JBIC). JBIC is understood to be currently reluctant to provide similar levels of support to projects in Dubai following the impact of the financial crisis on the emirate, which left many Japanese companies facing large payment problems, particularly on the Dubai Metro. JBIC was eventually involved in providing long term finance to settle the debts on the project.

Although JBIC does not have country ceilings on its exposure levels, its view on the risk of investing in Dubai projects has been impacted by the events during Dubai’s debt problems in 2009-2010.

According to a source at Dewa, a request for proposals is set to be issued to the prequalified developers on 22 May. A UK consortium comprising bank HSBC, engineering firm Mott MacDonald and law firm Clifford Chance are advising Dewa on the project.

The IPP at Hassyan was previously to be developed as an independent water and power project (IWPP), but the desalination element was subsequently dropped. According to a source at Dewa, the decision to adjust the project plan was taken following a revised water demand forecast. While power continues to increase at a steady rate, meeting water needs in coming years will be less difficult.

The Hassyan 1 project will be constructed on a build-own-operate (BOO) basis. When complete, it will generate 1,400-1,600MW and is to use natural gas/distillate fuel. The project is expected to be commissioned in 2014. Dewa will buy all the power produced by the project.

The chosen developer will take a 51 per cent stake in the Hassyan 1 IPP. It will be responsible for the development, financing, design engineering, procurement, manufacture, construction, permitting, commissioning, operation and maintenance of the power plant and associated facilities, as well as fuel.

The Hassyan 1 IPP is expected to be followed by five or six similar independent projects as part of Dewa’s private power programme. The project was originally planned to be built on an engineering, procurement and construction (EPC) basis.