Taqa has agreed to sell a 20% stake in a major power and water desalination plant to the Sumitomo Corporation.
Sumitomo of Japan wins Abu Dhabi power stake
The Abu Dhabi National Energy Company, or Taqa, has agreed to sell a 20 per cent stake in a major power and water desalination plant in the Shuweihat region of the emirate to Sumitomo Corporation, Japan's third-largest trading group, the companies announced yesterday. Sumitomo, which won an international bidding round for the stake in the Shuweihat S1 plant, said it was keen to take part in the fast-growing power and water sector in the Gulf.
Peter Barker Homek, the chief executive of Taqa, said the bidding was highly competitive. "We look forward to partnering with Sumitomo and benefiting from their international expertise," he said. Under the award, Sumitomo will also take a 50 per cent share in Shuweihat O and M Limited Partnership (SOMLP), which operates and maintains the plant. The companies declined to disclose the names of the other competing firms and the value of the winning bid.
Other foreign investors in Abu Dhabi's power sector include GDP Suez of France, Marubeni of Japan and International Power from Britain. After the deal is concluded later this month, Taqa will be left with 54 per cent of the Shuweihat S1 plant, while Britain's International Power will have 20 per cent and Adwea, the Abu Dhabi water and power utility, will have six per cent. Sumitomo's joint venture partner in the maintenance and operation company SOMLP will be International Power.
The S1 plant, located west of the city of Abu Dhabi, began operations in June 2005 and consists of a combined power and water generation plant with a capacity of 1,500 megawatts of electricity and 100 million gallons of water a day. The water and electricity produced by the S1 Plant is sold under a long-term power and water purchase agreement to the Abu Dhabi Water and Electricity Company. Demand for power and water is rising at more than 10 per cent annually, and several new independent water and power projects are expected in the near future. Sumitomo said it would continue to actively invest and participate in the development of power and water projects in UAE, as well as with its neighbours.
This is Sumitomo's second stake in the region's power sector, the first being a 30 per cent share in Bahrain's Al Hidd power company. @Email:email@example.com