7 July 2006 - The Abu Dhabi Water and Electricity Authority (Adwea) and Singapore's Sembcorp have signed an agreement to develop the Dhs6.4bn ($1.74bn) Fujairah power and water project.
The agreement was signed by Adwea Chairman Sheikh Dhiyab Bin Zayed Al Nahyan and Sembcorp Chairman, President and CEO Tang Kin Fei.
Under the terms of the agreement, SembCorp will acquire 40 per cent stake in the project while Adwea will retain the remaining 60 per cent stake. The project involves expanding the existing 625 MW power generation plant and the water
desalination unit with a production capacity of 100 million gallon per day in Fujairah.
The project will add 225 MW capacity to the existing power plant. Commercial operations are scheduled to begin in 2008.
The electricity and water output from the facility will be sold to the Abu Dhabi Water and Electricity Company (ADWEC) under a 22-year Power and Water Purchase Agreement (PWPA). The plant will be operated and maintained by SembCorp Gulf O&M Co Ltd, a wholly owned subsidiary of SembUtilities, under a long-term operation and maintenance contract for the entire term of the PWPA.
Tang Kin Fei, Group President & CEO of SembCorp, said: "We are pleased to have been selected by ADWEA to be its partner in the Fujairah IWPP. This success is recognition of our strong operating track record and reflects our ability to capitalize on our technical expertise in managing power and water facilities. Our partner ADWEA has an established track record in power and water projects and we look forward to working closely with them on this project."
SembUtilities' participation in the project follows a competitive bidding process that began in July 2005 and which involved other global utilities players companies.
Tang added further: "This acquisition is a major milestone for SembCorp. It is our first power and water investment in the Middle East as well as our largest utilities investment overseas to-date. The project is in line with our strategy to focus on businesses that provide stable and recurring income. It also gains us entry into the booming economies in the UAE and enables us to start a base from which to grow our integrated utilities business in Abu Dhabi and the Gulf region."