Fewa coal power project could cost $3bn

02 March 2017

The utility provider for the UAE’s Northern Emirates plans to build a 1.8GW coal-fired plant

The proposed 1.8GW coal-fired power plant in the UAE’s Northern Emirates could cost upwards of $3bn, according to sources close to the project.

Fewa, the utility provider for the Northern Emirates in the country, is planning to build a 1.8GW plant using an independent power project (IPP) model, and has appointed legal, technical and financial advisers for the scheme.

The Hassyan coal project currently being developed in neighbouring emirate Dubai is being built at a cost of $3.4bn, with $2.5bn of debt financing.

While the proposed Fewa project is smaller in size, the project may cost more depending on the type of technology the utility chooses for the project. The final ticket size will also depend on Fewa’s financial clout and negotiation capabilities as the deal progresses, one of the sources said.

Fewa has selected the UK’s Deloitte as financial adviser, the local office of Austria’s ILF Consulting Engineers as technical consultant and the UK’s Trowers & Hamlins as legal adviser for its planned power project.

The utility is expected to sign the agreements with the advisers imminently, sources told MEED on 1 March.

Feasibility studies for the project are expected to begin within the next few months, with the utility planning to begin the procurement process for the plant in early 2018, the sources said, adding that the utility is considering locations at either Umm al-Quwain or Ras al-Khaimah, due to the requirement for coal import facilities.

Dubai’s Hassyan IPP is the first coal power plant under execution in the GCC. In November 2016, a consortium led by Saudi Arabia’s Acwa Power and China’s Harbin Electric started construction work on the Hassyan scheme. The developer consortium signed a 25-year power purchase agreement (PPA) in June 2016 for the power scheme, which will comprise of four 600MW units.

 

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