Text size:

  • Small
  • Normal
  • Large
Dewa has received bids from consortiums to build and operate gas-fired Hassyan power plant. Photographer: Duncan Chard/Bloomberg
Dewa has received bids from consortiums to build and operate gas-fired Hassyan power plant. Photographer: Duncan Chard/Bloomberg

Taqa front-runner for Dubai plant

Dubai could look to the capital to deliver its first privately financed power plant after the Abu Dhabi National Energy Company (Taqa) submitted the lowest bid to build the project.

Dubai could look to the capital to deliver its first privately financed power plant after the Abu Dhabi National Energy Company (Taqa) submitted the lowest bid to build the project.

Dubai Electricity and Water Authority (Dewa) yesterday received bids from 13 companies, allied in four consortiums, for the construction and running of the Hassyan independent power project (IPP).

Taqa, which is owned by the Abu Dhabi Water and Electricity Authority (Adwea), teamed up with Japan's Marubeni and South Korea's SK Engineering & Construction to submit a tariff of Dh19,057 (US$5,187) per kilowatt/hour, making it the cheapest option. Dewa is expected to award the project in six to eight weeks.

While Abu Dhabi has a track record in using private finance to build power projects, Dubai has until now relied on conventional contracts. Under IPP arrangements, a developer builds and operates the plant, and owns all or part of the asset. The developer then sells the electricity under a power purchase agreement.

A Taqa official confirmed the consortium's status as the front-runner and put the investment at about $1.3 billion.

In the energy sector, companies that submit the lowest bid commonly win the contract. Moreover, Marubeni is an established player in the UAE's power sector, holding stakes in the Shuweihat 2 and Fujairah 2 independent power and water projects, plants in which Taqa owns a majority stake.

South Korean contractors also enjoy a good reputation in the region, with 60 per cent of all engineering, procurement and construction contracts won by Korean companies being executed in the Middle East, according to the Emirates Center for Strategic Studies and Research. The UAE is South Korea's single largest market in the region, with more than a third of all contracts won here.

The bids are not far apart, however, with the most uncompetitive offer costing Dewa less than 1 fil per kilowatt hour more.

The second-lowest bid was received from a consortium of Qatar Electricity & Water Company, Qatar Petroleum and Siemens Power Ventures.

The bid by Acwa Power, Kepco, Samsung Engineering and CNT was slightly less competitive, with the most expensive bid received from GDFSuez, Mitsui and GS Engineering & Construction.

The gas-fired power plant will generate 1,600 megawatts of electricity. The winning consortium will own 49 per cent of the project and sell Dewa electricity under a 25-year power-purchase agreement. Dewa will hold the remaining stake in the power plant.

Marubeni and Taqa each have a 40 per cent share in the bidding consortium, with SK holding the remainder. The Japanese power company is leading the bid.

Taqa invests in Abu Dhabi's independent power projects, as well as a diverse set of energy projects worldwide.

Abu Dhabi's Adwea owns a 51 per cent stake in the investment fund, with the Fund for the Support of Farm Owners in the Emirate of Abu Dhabi holding 24.1 per cent. The rest is publicly listed.

fneuhof@thenational.ae

twitter: Follow and share our breaking business news. Follow us

Back to the top

More articles


Editor's Picks

 Cityscape Abu Dhabi 2014 will run until April 24, 2014. Fatima Al Marzooqi / The National.

In pictures: Cityscape Abu Dhabi 2014 opens
at Adnec

Key developments and master plans are being unveiled at this year’s property exhibition in the capital.

 Marina Square apartments Reem Island: Q1 2% rise. Studio - Dh65-68,000. 1BR - Dh75-95,000. 2BR - Dh110-145,000. 3BR - Dh170-190,000. Q1 2013-Q1 2014 no change. Sammy Dallal / The National

In pictures: Where Abu Dhabi rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Abu Dhabi have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Room with a view from one of the 21 duplex penthouses located in the Gate Towers sky-bridge. The sports courts and swimming pools can be seen below. Courtesy Alda

In pictures: Aldar’s Gate Towers Penthouse Collection on Reem Island

Aldar launched its Gate Towers Penthouse Collection at Cityscape Abu Dhabi. The launch features 21 penthouses spanning the skybridge, with each having a private indoor pool and incredible views.

 The Wind, Energy, Technology and Environment Exhibition takes place from April 14 to April 16. Above, the Dewa showroom during last year’s Wetex. Jaime Puebla / The National

April corporate and economic calendar for the UAE and overseas

From Cityscape to Wetex to stock-market holidays to nations reporting first-quarter GDP figures, here is our helpful calendar of April's business events in the UAE and internationally.

 The Greens, villas: Q1 no change. 3BR - Dh210-250,000. 4BR - Dh210-260,000. 5BR - Dh220-300,000. Q1 2013-Q1 2014 5% rise. Pawan Singh / The National

In pictures: Where Dubai rents have risen and fallen, Q1 2014

Find out how rental prices in the prime locations in Dubai have altered during the first three months of the year and the current rates you will pay according to data provided by Asteco.

 Get the latest information on credit cards, bank accounts and loan products in the UAE. Mark Lennihan / AP Photo

Rates report: Latest on UAE loans, accounts and credit cards

Souqamal.com brings you the latest interest rates on banking products in the UAE.

Events

To add your event to The National listings, click here

Get the most from The National