Power Engineering - UAE power company seeks developer for Fujairah project

9 January 2004 - The Union Water & Electricity Company (UWEC) has invited international power developers to submit by February 1, their expressions of interest for taking equity stake in its power generation and water desalination and transmission project at Qidfa in Fujairah, United Arab Emirates.

The invitation is in line with UWEC's stated objective of converting the venture into an independent water and power project (IWPP), the privatisation policy of the Abu Dhabi government and the ongoing privatisation of the power and water sector.

"UWEC is seeking an experienced power and water developer to invest in its existing project, as well as the planned expansion as a strategic partner," says UWEC General Manager Ibrahim Al Ansari, according to a press release issued today. "We intend to finalize the process by the third quarter of 2004 so that we can start construction work on the second phase."

The first phase of UWEC's project in Fujairah has capacity to produce 656MW of power and 100 million gallons a day (mg/d) of potable water. It is capable of exporting up to 500 MW of power to the planned Emirates National Grid (ENG) and 100 mg/d of desalinated water to the emirate of Abu Dhabi and the Northern Emirates. The second phase, currently in the feasibility stage, will involve the addition of up to 1,000 MW and 100 mg/d. UWEC is currently pre-qualifying contractors for the engineering, procurement and construction (EPC) contracts after appointing Germany's Fichtner as the consultant for the scheme in July 2003.

From the first phase, UWEC will supply up to 90 million gallons a day (mg/d) of desalinated water to Abu Dhabi and 10 mg/d to the Northern Emirates. The water will be transported through a 179-kilometer pipeline from Qidfa in Fujairah to Sweihan in Abu Dhabi and will be stored in five 20 mg capacity storage tanks at different locations. UWEC will supply the water to Abu Dhabi Water & Electricity Company (ADWEC), the procurement arm of the Abu Dhabi Water & Electricity Authority (ADWEA), which will then supply it to Abu Dhabi Transmission and Dispatch Company (Transco) and Al Ain Distribution Company (AADC) for further distribution to consumers through their networks.

An offtake agreement with ADWEC is expected to be signed by the end of the first quarter of 2004. Water to the Northern Emirates will be supplied through the Federal Electricity & Water Authority (FEWA) and will start reaching the public once the federal authority has made the necessary arrangements for its distribution. Power and water started flowing from UWEC's first phase development one month ahead of schedule in February and April respectively. The company is already supplying power to FEWA on trial basis and has so far transmitted more than 550,000 MWh, while the water desalination plant has produced about 6,000 mg of water.

Once all the agreements are in place, UWEC will be supplying up to 500 MW of power to FEWA's network and ultimately to the upcoming Emirates National Grid (ENG) network. This will increase further through the completion of the second phase expansion, enabling the company to play a major role in the ENG and export power to neighbouring countries through individual agreements or through the planned GCC power grid.

UWEC was set up through an Emiri Decree issued on 26 June 2001 by His Highness Sheikh Hamad Bin Mohammed Al Sharqi, Supreme Council member and Ruler of Fujairah. On 11 September 2001, His Highness Sheikh Khalifa Bin Zayed Al Nahyan, Abu Dhabi Crown Prince, Deputy Supreme Commander of the UAE Armed Forces and Chairman of Abu Dhabi Executive Council, issued Resolution No. 3 of 2001 to establish the company's five-member Board of Directors headed by Sheikh Hamed Bin Zayed Al Nahyan and authorized a paid-up capital of Dh 1.5 billion (US$408.6 million).

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