Adwea awards to GDF Suez 25-year contract to manage Mirfa project

Abu Dhabi Water and Electricity Authority (Adwea) yesterday awarded GDF Suez a 25-year contract to manage the US$1.5 billion Mirfa power project.

Construction work is expected to take about 31 months and operations will be rolled out in a phased manner between 2016 and 2017, the French utility said.

Adwea will hold an 80 per cent equity stake in the venture and the rest will be held by GDF Suez.

“The debt requirement for the project shall be met through funding from a combination of local and international banks, with commitments currently oversubscribed,” said a GDF-Suez spokesperson in an emailed statement.

The project, which will be located about 110km from the capital in the Western Region, will have a power generation capacity of 1,600 megawatts and 270,000 cubic metres of fresh water a day.

“This new project will allow us to pursue our growth strategy in the region and to meet the increasing demand for both electricity and water in the UAE,” said Gérard Mestrallet, the chairman and chief executive of GDF Suez.

GDF Suez manages five other water and power plants in the Emirates. These include Al Taweelah A1, Shuweihat S1, Umm Al Nar, Fujairah F2 and Shuweihat S2, which together contribute about 8.8 gigawatts of power and 2.5 million cubic metres of water a day, figures from the company’s website show. The completion of the Mirfa project will lift the company’s power generating capacity to 10.4GW and 2.77 million cubic metres a day.

The Mirfa project involves “the acquisition of certain existing water and power facilities, the development, design, engineering and construction of new power and water facilities, as well as the operation of the plant”, GDF Suez said.

The engineering, procurement and construction has been handed to a consortium comprising South Korean companies Hyundai Engineering & Construction and Hyundai Engineering and Italy’s Ansaldo Energia. Hyundai E&C said in a regulatory filing to the South Korean stock exchange that the value of its portion of the contract is $715.4 million and that its partnership with GDF Suez could lead it to winning more contracts in the future. Its overseas order book currently stands $6.71bn. Shares of Hyundai E&C gained 1.03 per cent to close at 59,000 won. Shares of GDF Suez were up 0.25 per cent at €2018 at 3:15pm UAE time.

The French company Degremont will handle the reverse osmosis facility. The Suez Environnement subsidiary was last month awarded a contract by Masdar to build an energy-efficient pilot desalination plant, powered by renewable energy. Degremont will be responsible for the design, engineering, procurement, construction, operation, maintenance and evaluation of the pilot plant, over the course of 18 months.

Power demand in Abu Dhabi is growing at a rate of more than 10 per cent a year, while water consumption is projected to rise from 880 million imperial gallons a day at present to 1.15 billion by 2021 as a result of new industrial developments and a fast-growing population.

Abu Dhabi inaugurated its most recent power plant – Shuweihat S2 in 2011. The $2.7bn plant near Jebel Dhanna produces 1,510 megawatts of electricity capable of fuelling 100,000 homes and meeting 15 per cent of the emirate’s water needs.

Abu Dhabi is also pinning its future needs on nuclear power, which is expected to power the economy when the first phase becomes operational in 2017.

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