Abu Dhabi: 10 New Power Firms Are Being Set Up As Part Of Privatisation.

The electric power sector in Abu Dhabi is being restructured and partly privatised under a programme launched in October. The sector will consist of ten new companies, to begin operation on Jan. 1, 1999, which will replace the emirate's recently-disbanded Water and Electricity Department. One of the companies will be the first independent power and water producing (IPWP)

venture in Abu Dhabi.

The restructuring process is undertaken by the Regulation and Supervision Office for the Water and Electricity Sector, a body created recently as part of the programme, along with the Abu Dhabi Water and Electricity Authority (ADWEA). ADWEA will be the purchaser of power and water from the new companies which are to begin operation on Jan. 1. The ten companies will be as follows:

The Emirates CMS Power Co. The first IPWP in the UAE emirate, this will be a joint venture to be owned 60% by the state's new Emirates Power Company (EPC)

and 40% by CMS Energy Corp of the US. It will run the gas-fired Taweelah A-2 combined cycle power plant and water desalination complex, which will be built with a capacity to generate 763 MW and 50 million gallons a day of water. The complex will cost about $800 million and its first gas turbine should be in operation by May 2000. Full operation of the complex is scheduled for August 2001. Taweelah, about 40 km south-east of Abu Dhabi city, is the main power and water desalination centre in the emirate.

CMS Energy Crop. signed the JV agreement with EPC on Oct. 3, against competition from several companies. The US company 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 will manage the financing and construction of the complex. The power and water outputs from the complex will be sold to ADWEA under a 20-year contract. The JV will have a capital of AED408.4m (about $111m), of which EPC will subscribe to AED244.8m ($66.8m) and CMS to AED163.6m ($44.5m). The financing is to be arranged by mid-December on the basis of a 75:25 debt/equity package, with the borrowing secured on a non-recourse basis.

About $600m worth of debt has been fully underwritten by Barclays Capital, the lead arranger which is expected to be joined by a group of underwiters.

The complex is to be built by a partnership of Siemens of Germany, which will provide the turbines and related installations, and Hanjung of South Korea which will supply the four multi-stage flash (MSF) desalination units and be in charge of all civil engineering work. Their contract is worth about $695m.

CMS has contracted Mott MacDonald of the UK to act as its engineering consultant, having already provided conceptual designs, performance models and specifications. It will supervise all engineering activities, provide project management assistance, audit the contractor's designs, carry out site installation and provide commissioning supervision during the construction period.

EPC, 100% owned by the Abu Dhabi government, will represent the state's interests in new IPWP joint ventures to be established in the emirate. It will have a capital of AED428m ($116m), with the Abu Dhabi government to subscribe initially to 25% and to pay the rest on demand by ADWEA. ADWEA, chaired by Shaikh Dhiyab Bin Zayed Al Nahyan (one of the bright young sons of Abu Dhabi Ruler and UAE President Shaikh Zayed), is now the highest authority for the power and water desalination sector and will spearhead the privatisation process in the emirate. ADWEA's next project is a 1,000 MW and 100m g/d co- generation complex to be built as a JV.

Al Taweelah Power Co. This will be in charge of the Taweelah B plant, which is being expanded to 1,220 MW and 103m g/d under a $360m project. Taweelah B will become the biggest single producer of power and water in the emirate.

Umm Al Nar Power Co. will run the Umm Al Nar power and desalination complex, which has a capacity of 1,215 MW and 97m g/d, and the 120 MW Bani Yas station.

Umm Al Nar island is the site of an oil refinery.

Al Mirfa Power Co. will be in charge of two major power plants in the western region. It will own and operate the Mirfa co-generation plant, which has a capacity of 246 MW and 16.2m g/d, and the 134 MW plant at Madinat Zayed.

Bainounah Power Co. will be in charge of two co-generation plants and one power plant: the 269 MW and 28.8m g/d Taweelah A complex, the 540 MW/16m g/d Abu Dhabi Central Plant, and the 461 MW Al Ain station.

Abu Dhabi Distribution Co. will be in charge of supplying and distributing desalinated water and power in the area of Abu Dhabi Municipality.

Al Ain Distribution Co. will be in charge of supply and distribution of water and power in the area of Al Ain Municipality.

Abu Dhabi Transmission & Despatch Co. will be in charge of all power and water transmissions in the emirate.

Abu Dhabi Water and Electricity Co. will be in charge of procurement for all water and power projects.

Abu Dhabi Co. for Servicing Remote Areas will be in charge of generation and supply in all the remote regions of the emirate. Its total capacity will be 286 MW and 31.1m g/d, consisting of small plants.