Marubeni wins Fujairah-2 power and water project in the UAE

03 August 2007

The emirate of Fujairah, in the UAE, has selected Japan''s Marubeni Corporation to build, own and operate the Fujairah-2 power and water project. The 20-year power and water purchase agreement was officially signed with Abu Dhabi Water & Electricity Authority (ADWEA) on 1 August, 2007.

Marubeni had formed a consortium with International Power plc to participate in the global competitive bidding process in April 2007, emerging as the successful bidder.

With a total project cost of $2.8 billon, inclusive of the costs of constructing power generation and seawater desalination plant, it is the largest newly constructed independent water and power projects in the UAE.

After the signing of the PWPA, a new project company will be set up with the Marubeni-IPR consortium holding a 40-per cent stake and ADWEA retaining the majority 60 per cent.

The new project company will finalise negotiations for loan agreements, with $2.2 billion of the total financing requirement coming from a project finance loan. Commercial operations are due in 2010.

The Marubeni-IPR consortium is negotiating with international commercial banks including Sumitomo Mitsui Banking Corporation of Japan, Calyon of France and Citibank N A. of the US. In addition, Japan Bank for International Cooperation is also expected to support this project.