Qatar Electricity and Water Company buys stake in Jordan power plant

09 February 2012

Amman East was Jordan’s first independent power project

Qatar Electricity and Water Company (QEWC) has acquired a stake in AES Oasis, which owns part of the Amman East independent power project (IPP) in Jordan.

QEWC has bought the 38.9 per cent stake in AES Oasis from the Islamic Development Bank’s IDB Infrastructure Fund. AES Oasis owns a 60 per cent stake in Amman East IPP. The transaction has been signed and is expected to close within the first quarter of 2012.

The Amman IPP has a capacity of 370MW and was Jordan’s first private power plant. The project was launched in 2007 and entered commercial operations in 2009.

The IDB decided to sell its stake as the fund is approaching the end of its life. QEWC will join present shareholders AES Corporation from the US and Japan’s Mitsui as owners of the power plant.

This is QEWC’s first cross-border M&A transaction and is likely to be followed by others in the future. QEWC’s General Manager, Fahad Hamad al-Mohannadi, said the company plans to continue its commitment to its core expertise, as well as expanding its operations outside of Qatar.

QEWC also has a stake in a new power plant in Oman. Sur IPP, the sultanate’s latest power plant, is 15 per cent owned by QEWC. QEWC’s current portfolio includes more than 5.74GW of power capacity and 258 million gallons a day of water capacity, including the capacity of the projects under construction.

QEWC was advised by the UK’s RBS Corporate Finance as financial adviser and the UK’s Norton Rose and the local Khalifeh & Partners acting as legal advisers.

The UK’s Rothschild was financial adviser to the IDB Infrastructure Fund, while Linklaters and PricewaterhouseCoopers, both of the UK, were the IDB’s legal and tax advisers respectively.

Amman East IPP was originally to be sold off along with two plants in Pakistan and one in Oman belonging to AES Oasis, a joint venture comprising AES and the IDB Infrastructure Fund.

Saudi Arabia’s ACWA Power bought out the Omani plant, the Barka 1 independent water and power project (IWPP), while the local Nishat Mills bought out its stake in the Pakistani project.

The decision was taken to exempt the Amman East project from the sale in summer 2009, due to issues with the non-AES stakeholders.

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