The news that Dubal Holding, a distinct but related entity of Dubai Aluminium (Dubal), has been prequalified to bid on the emirate’s Hassyan coal-fired independent power project (IPP) has surprised those involved in the region’s power market. It also raises the question of the long-term goal of liberalising Dubai’s power market.

For the state utility, Dubai Electricity & Water Authority (Dewa), appointing Dubal to develop and operate the country’s first major independent power project (IPP) would offer certain attractions. Dubal has proven over a period of more than 30 years that it is able to produce energy and operate one of the largest power plants in the emirate. The proven expertise would mean the new developer would offer a high chance of succeeding with Dubai’s first coal project.

However, while Dubal has a proven track record in the local market, its appointmentl may contradict the aim of liberalising the power market. While bidding for the Hassyan project is being conducted through an open public tender process to ensure transparency, one of the primary reasons for launching the project as an IPP is to encourage private participation in the power sector. If the contract for Dubai’s first major IPP is awarded to what is effectively a state-owned company, the emirate’s ambition to liberalise the utility market will be open to questions.

As Dubai’s first major IPP and the UAE’s first major coal scheme, the Hassyan project is already an interesting development. The participation of Dubal in the bidding process has increased its intrigue even further.