ABU DHABI - Restructuring & Privatisation.

The power and water system in Abu Dhabi was restructured and partly privatised under a programme launched in October 1998. Now the system consists of ten companies, in operation since Jan. 1, 1999. The Abu Dhabi Water and Electricity Authority (ADWEA), chaired by Shaikh Dhiyab Bin Zayed Al Nahyan, replaced the Water and Electricity Department, which was disbanded under Law No. 2 issued in March 1988.

Restructuring was undertaken by the Regulation and Supervision Bureau for the Water and Electricity Sector (Bureau), a body created as part of the programme in 1999. Shaikh Dhiyab then appointed a three-member board for the Bureau consisting of Zaal Mohammed Al Hameeri as chairman, Graeme Sims as general manager and Ibrahim Yusuf Mubaydeen as a part-time member. The Bureau has since issued licences for the ten companies, which are:

Abu Dhabi Water and Electricity Co. (ADWEC), fully owned by the state (ADWEA), is the emirate's single buyer of water and power and the firm in charge of procurement for all water and power projects.

Abu Dhabi Transmission & Despatch Co. (Transco), fully owned by ADWEA, is in charge of all power and water transmissions in the emirate.

Al Taweelah Power Co., fully owned by ADWEA, is in charge of the Taweelah B plant, which has a capacity of 1,069 MW and 95 MG/d. This is being expanded to 1,220 MW and 103 MG/d under a $360m project to be completed in early 2001.

Umm Al Nar Power Co., fully owned by ADWEA, runs the Umm Al Nar power and desalination complex, which has a capacity of 1,148 MW and 92 MG/d, and the 120 MW Bani Yas station. Umm Al Nar island is the site of an oil refinery.

Bainounah Power Co. is in charge of two co-generation plants and one power plant with a combined capacity of 1,201 MW and 44 MG/d. The plants are the Taweelah A unit, the Abu Dhabi Central Plant, and the Al Ain station.

Al Mirfa Power Co. is in charge of two power plants and their water desalination units in the western region, which have a combined capacity of 311 MW and 16.2 MG/d. They include a plant at Madinat Zayed.

Taweelah A-2 Emirates CMS Power Co. This is the first independent power and water producing (IPWP) venture in Abu Dhabi. It is owned 60% by ADWEA's new and state-owned Emirates Power Co. (EPC) and 40% by CMS Energy Corp of the US. The first two gas-fired units of the Taweelah A-2 combined cycle plant went into operation in July 2000 with a capacity of 370 MW. By Aug. 1, 2001, Taweelah A-2 will be fully operational with a capacity of 770 MW and 50 MG/d. Its complex will cost about $800m. (CMS Energy signed its JV agreement with EPC on Oct. 3, 1998, against competition from several companies. CMS was selected in mid-September by ADWEA and its choice was confirmed on Sept. 29 by Abu Dhabi's Executive Council - local government. Apart from being the operator, CMS' local unit CMS Generation Taweelah is managing the financing and construction of the complex. Its power and water outputs are sold to ADWEC under a 20-year contract).

Abu Dhabi Distribution Co. (ADDC), fully owned by ADWEA, is in charge of supply and distribution of water and power to the area of Abu Dhabi Municipality, with a capacity to serve a population of 750,000. ADDC is to be privatised gradually.

Al Ain Distribution Co., fully-owned by ADWEA, is in charge of supply and distribution of water and power in the area of Al Ain Municipality, with a capacity to serve a population of 370,000. This, too, is to be privatised gradually.

Abu Dhabi Co. for Servicing Remote Areas, fully owned by ADWEA, is in charge of generation and supply in all the remote regions of the emirate. Its capacity is 286 MW and 31.1 MG/d, consisting of small plants, to serve a population of 100,000.

EPC, 100% owned by ADWEA, represents the state in all the IWPPs. It has a capital of Dh428m ($116m). It was formed in mid-1998 under Law No. 2 for the restructuring and privatisation of the power and water system. Apart from is 60% holding in Taweelah A-2 Emirates CMS Power Co., the first IWPP in Abu Dhabi, EPC will hold a similar controlling stake in each of the other IWPPs. All the IWPPs will be on BOO basis, as in the case of the first one.

The second IWPP is for a $1.5 bn project to expand the Taweelah A-1 complex from 255 MW and 29 MG/d to 1,350 MW and 84 MG/d. EPC's partners in this are TotalFinaElf of France and Tractebel of Belgium, each holding 20% in the venture. Their selection as one group was confirmed by ADWEA on Aug. 1, 2000. The JV has taken ownership of the existing plants and work on their expansion began in October 2000. The first new gas turbines are to be installed by mid-2002. The whole expansion should be completed in April 2003. As in the case of the first IWPP, this will sell its output to ADWEC under a 20-year contract.

The third IWPP is for a $1.8 bn project to have a grassroots complex built at the western region of Shuweihat, near Jebel Dhanna, with a co-generation plant to have a capacity of 1,500 MW and a 100 MG/d water desalination system. This will be the first phase, to be completed by 2004.

Potential foreign partners to bid for the venture next month will include CMS Energy Corp., ABB Energy Ventures of Switzerland, Tractebel, a Japanese consortium of Mitsui & Co. and Tokyo Electric Power Co. (Tepco), a partnership of National Power of the UK and Union Fenosa Acex of Spain, AES Corp. of the US, and a partnership of the London unit of PSEG Global Power of the US and Marubeni Corp. of Japan.

The fourth and fifth IWPPs are for two further phases at Shuweihat which should bring capacity there to 5,000 MW and 300 MG/d. Shuwaihat-2 should be operational by mid-2006. Shuweihat-3 is to be completed in mid-2009.