HSBC in talks firms over $1.5bn DEWA plant
Dubai's first IPP is expected to attract four or five bids
Dubai Electricity & Water Authority may get four to five bids from companies to build the emirate’s first power plant with private investment, said HSBC Holdings Plc, an adviser on the $1.5bn project.
HSBC expects bids by the end of November, Jonathan Robinson, the bank’s head of project finance in the Middle East, told reporters in Dubai on Sunday.
The monopoly state utility plans to build a 1,500-megawatt power station and water-desalination facility, to begin operations in 2015 at Hassyan on Dubai’s border with Abu Dhabi.
Dubai, the second-largest sheikhdom in the UAE after Abu Dhabi, is seeking to ensure its long-term energy supply by encouraging investment and diversifying sources of electricity to include clean coal, solar and nuclear power. While the UAE is the fourth-largest crude producer in OPEC, Dubai produces less than four percent of the country’s oil.
DEWA, considered one of Dubai's strongest assets, has sole responsibility for transmission and distribution of power and water supply in the emirate.
The UAE is one of the highest per capita consumers of water and electricity in the world.
Dubai's Supreme Council of Energy said in August it planned to launch a gas strategy in 2012 aimed at cutting energy demand in Dubai. The emirate’s top energy council also said it would freeze electricity and water tariffs in the emirate over the coming years.
DEWA’s chief executive said in March the company plans annual capital expenditures of around $1bn over the next three years and expects Dubai's energy use to increase by between six and seven percent in 2011.
The utility was rated investment grade by Standard & Poor's in June. The international ratings agency rated it BBB-, the lowest investment grade rating on the agency's scale, with a "stable" outlook, citing the high potential of government support in the event of financial trouble.