Abu Dhabi will receive bids for the emirate's next large-scale power plant next month and plans to choose a winning consortium before the onset of summer.
Asian players are dominating the bidding process. Japan and South Korea field the majority of candidates for the 1,500 megawatts Al Mirfa gas-fired plant, as financing for long-term infrastructure projects in Europe is drying up, while Asia's banks are flush with liquidity.
"After the submission it's going to take around two months to do the evaluation," said Abdulla Saif Al Nuaimi, the director general of the Abu Dhabi Water and Electricity Authority (Adwea). "We are estimating that we will award it before the summer of 2013."
Six consortiums have qualified and are expected to make bids. Of the 20 companies that have grouped together, 13 are either South Korean or Japanese. Five are European, with the other two coming from the Arabian Gulf.
"European banks are not that active in this kind of long-term financing," said a director at one Japanese power company.
While European companies can draw on government-backed export credit agencies, much like their Japanese and South Korean counterparts, European banks have yet to recover from successive crises that have rocked the continent's financial sector.
"Europeans have always made a good showing, but they are struggling more now mainly because of the banks. The disparity is widening, Asian banks are liquid and are looking to deploy it," said Jonathan Robinson, the head of project finance for HSBC in the Middle East and North Africa. "I think this is set to continue for some time."
Deepening trade ties between the region and Asia, which receives the bulk of Arab oil exports, further plays into the hands of Asian power companies, said Mr Robinson.
The bidders are competing for a minority stake in the new project. They include Japan's Marubeni and France's GDF Suez, the two international stakeholders in the most recent power project by Adwea, the Fujairah 2 plant.
Adwea's power plants are operated under a public-private partnership model, in which the utility maintains a 60 per cent stake in the project, while awarding private companies the right to build and operate the plant in return for receiving payment for the electricity and water produced. Adwea pioneered the use of the so-called Independent Water and Power Project model in the Gulf. The utility transfers its stake in projects to the Abu Dhabi National Energy Company, also known as Taqa, a company it controls.
Adwea is racing against time to stave off a power shortage in Abu Dhabi and the UAE at large. Rapidly increasing demand has forced the utility into an extensive capacity expansion programme.
The emirate is augmenting natural gas-fired plants such as Al Mirfa with four nuclear reactors, built by the Korea Electric Power Corporation, and a renewable energy portfolio.
Official estimates put peak demand for electricity supplied by Adwea at more than 13,000MW this year, rising to about 19,000MW in 2017, when the first reactor comes online. By the end of this year, capacity is expected to stand at about 14,390MW.
The new plant will replace an existing 200MW plant that caters to local demand in Mirfa. The complex will integrate desalination facilities able to desalt 53 million gallons of seawater a day.
Bidders will have to incorporate into their plans four 100MW gas turbines that were bought some years ago for a power plant in Ajman before the project was scrapped. The turbines will now become part of Al Mirfa's power generation capacity.