UK-led group closes in on Umm al-Nar IWPP

31 January 2003
The selection of a developer to carry out the Umm al-Nar independent water and power project (IWPP) moved a step closer in late January, after the group headed by the UK's International Power (IP)was ranked as the first bidder by the client, Abu Dhabi Water & Electricity Authority (ADWEA). The move, effectively nominating the consortium as the preferred bidder, leaves the way open for detailed contract negotiations to begin between ADWEA and the IP-led consortium. One other group, headed by France's TotalFinaElf, is bidding for the brownfield IWPP (MEED 22:11:02).

The IP consortium, which includes Japan's Mitsui & Companyand Tokyo Electric Power Company (Tepco), has been in pole position for the project since it submitted in mid-November the highest offer for the existing Umm al-Nar plant. Its acquisition price of AED 3,699 million ($1,008 million) was considerably higher than the AED 2,460 million ($670 million) offer from TotalFinaElf.

The next step in the project's implementation is expected to come in early March with the signing of a power and water purchase agreement (PWPA) between ADWEA and the selected developer. Financial close is scheduled for June.

The IP group has as its nominated engineering, procurement and construction (EPC) contractors a team made up of Toshiba Corporationand Hitachi Zosen Corporation, both of Japan, and the UK's Weir Westgarth. Its bank group consists of HSBC, Gulf International Bank, Bank of Tokyo-Mitsubishi, ING, Sumitomo Mitsui Banking Corporationand West LB.

Developers are bidding for the project on the basis of taking a 40 per cent stake in a new project company, which will purchase 70 million gallons a day (g/d) of recently-installed desalination capacity at the Umm al-Nar site.

The successful bidder will also be responsible for installing 1,500 MW of new generating capacity and up to 25 million g/d of new desalination capacity on a build-own-operate basis.

Umm al-Nar will be Abu Dhabi's fourth IWPP. ADWEA is being advised on the project by Credit Suisse First Boston, Germany's Fichtnerand the US' White & Case(MEED 21:9:01).

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