Fujairah 2 reaches financial close
- From: Vol 8, Issue 12 (December 2007)
- Category: General
- Region: Middle East
- Country: United Arab Emirates
- Related Companies: Alstom, Calyon, Citibank, International Power, Marubeni, OTV, Sidem, SMBC and Veolia
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International Power and Marubeni have taken ADWEA’s latest IWPP to financial close on schedule.
The Emirates’ largest greenfield IWPP (independent power and water project) was right on target, as it reached financial close on 13 December. The 130 MIGD (591,000m3/d) & 2000MW Fujairah 2 IWPP, which ADWEA will develop in partnership with International Power and Marubeni, will be ADWEA’s second IWPP to be located in the eastern emirate of Fujairah on the shores of the Gulf of Oman.
Calyon, Citibank, SMBC and JBIC led the financing of the $2.7 billion project. The financing includes two non-recourse loans: a $1.284 billion 23-year term JBIC tranche, and an $856 million 23-year commercial loan. There is additionally a $565 million equity bridging loan. As with previous IWPPs in the emirate, ADWEA will retain 60% of the project company, Fujairah Asia Power Company (FAPCO), with the two developers holding equal shares of the remaining 40%. The total project equity is $560 million, giving each developer $112 million of investment exposure.
This will not be the first ADWEA IWPP for either developer: International Power worked on the Umm al Nar and Shuweihat IWPPs, and is currently in the process of developing a reverse osmosis plant for ADWEA at Umm al Nar; Marubeni is part of the TAPCO (Taweelah Asia Power Co.) consortium responsible for developing the Taweelah B extension. As on previous ADWEA IWPPs, the Japanese connection provides access to JBIC’s deep pockets.
The first drawdown of funds is scheduled to take place on 16 December, paving the way for the EPC team of SIDEM and Alstom to proceed. Sidem will provide 12 of its 37,732m3/d (8.3 MIGD) multi-effect distillation desalination units to the project, while Alstom will take care of the power capacity. In addition to this, there will also be 136,380m3/d (30MIGD) of reverse osmosis capacity provided by Veolia’s OTV.
FAPCO has a 20-year power and water purchase agreement with offtaker ADWEC. Under the terms of the agreement, ADWEC (Abu Dhabi Water & Electricity Company) will provide a natural gas feedstock on a pass-through basis. Should all go to plan, the project will become fully operational by the end of 2010.