IWPP
THE FUJAIRAH II IWPP With a net generating capacity of 2000 MW and approximately 600 000 cubic meters of potable water a day the Fujairah II project will be the largest IWPP in the UAE. A consortium comprising ADEWA (60%), Marubeni (20%) and International Power (20%) own holding company Fujairah Asia Power Company (Fapco). Alstom and Sidem, a subsidiary of Veolia Water, have been awarded the engineering, procurement and construction (EPC) contract for Fujairah II . Marubeni and International Power are charged with operating and maintaining the IWPP in a 50:50 joint venture, under a 20 year PWPA. Power production rests on five Alstom GT26 gas turbines. These will be capable of dual fuel operation, burning natural gas, with the capability of operating on liquid fuel if the gas supply is interrupted. The GT26 has a rated output in open cycle application of 288.3 MW and an efficiency of 38.3 per cent. The desalination plant is made up of two sections, one based on Multiple Effect Distillation (MED) and the other on Reverse Osmosis (RO). The largest of these, the MED sec-
tion, takes steam from the combined-cycle power plant to generate potable water. The smaller section based on RO is driven not by steam but by power. This combination allows for the optimisation of steam and power output from the combined-cycle power plant in order to provide constant water production as power demand varies with the seasons. The total project costs of Fujairah II amount to US$2.7 billion. Of this, US$ 2.1 billion has been financed by long term debt, of which approximately half has been lent by JBIC. The equity amount worth US$565 million was financed by an equity bridge facility, according to International Power, which will have to be repaid by ADWEA, Marubeni and International Power in proportion to their equity stake in July. The plant is in the process of commissioning its gas turbines, and testing its desalination units. According to International Power managing director Ranald Spiers, Fujairah II will start becoming operational within Q2. The project has been built adjacent to the existing Fujairah I plant.
A 3D Model of the Fujairah II power and desalination plant
22 Utilities Middle East
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May 2010
“The GCC countries are very important to Japan. We think that investment in the region, especially in the UAE, is very important to maintain good relationships” Michio Hayashibara, director at Marubeni
helps, especially as government institutions in the region are quite complex.” Governments in Kuwait, Iraq and Dubai, which have not yet adopted the IWPP model to address their power and water needs, will have to consider all those issues. Most observers see Kuwait some way off an IWPP. One problem for investors is the political system, says Fèvre. “In Kuwait, the big problem is political risk as there is the constant struggle between the executive and parliament and there is no certainty about what’s going to happen to any particular projects.” Security concerns mean that Iraq will also have to wait some time before IWPPs become a possibility. In Dubai, plans are underway to built the emirate’s first IWPP. The
proposed 1.500MW plant at Hassyan is expected to come online in 2013 or 2014. The project is at the advisory stage, observers believe that the procurement period may take longer due to Dubai’s inexperience in handling IWPPs. In light of the global financial meltdown and the impact is has had on the GCC, developers are cautious about committing. “Participating companies may have certain prerequisites they want to see, for example that power projects are backstopped by the government, and potentially further backstopped by national funds,” says one contractor. These concerns about financing utility projects in the region highlights one thing: public private partnerships in the Middle East are only as strong as the government that support them.
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