Dubai Electricity and Water Authority (Dewa) on Tuesday announced the preferred bidder consortium for the first phase of the 1,200 MW Hassyan clean coal power project.
Dubai utility's managing director and chief executive officer Saeed Mohammed Al Tayer said at a news conference in Dubai that a consortium including China's Harbin Electric and Saudi Arabia's ACWA Power will build and operate the $1.8 billion plant.
The consortium bid to provide electricity at a levelised cost of 4.501 US cents per kilowatt hour.
The debt to equity ration will be 78/22. Dewa will be the major stakeholder with a 51 per cent share in the plant and invest $200 million.
Paddy Padmanathan, chief executive of ACWA Power, told reporters on Tuesday that the consortium is talking to Export-Import Bank of China and lenders including Industrial and Commercial Bank of China, Bank of China, Standard Chartered and First Gulf Bank for about a $1.4 billion loan for the project.
This project supports the Dubai Plan 2021 to diversify Dubai's energy mix in the following way: 71 per cent from gas, 15 per cent from solar power, seven per cent from clean coal, and seven per cent from nuclear power.
The Hassyan clean-coal power plant will use the best available technologies and the highest global standards in this field. It will use the Ultra-supercritical technology to reduce any negative impact on the environment. Dewa has requested that the project meets flue gas emission limits more stringently than emission limits in the Industrial Emissions Directive (IED) of the European Union and in the International Finance Corporation (IFC) Guidelines.
The project is supported by a 25-year Power Project Agreement (PPA). The bidder has been required to put in place arrangements for the assured delivery of coal to the project over the life of the agreement. The first phase of the project comprises two units of 600 MW each and will be operational by March 2020 and March 2021, respectively.
Al Tayer informed that Dewa received expressions of interest from 48 international applicants. Seven global developers were shortlisted. Dewa received four offers from the shortlisted bidders.
DEWA was advised by financial advisor Ernst and Young, technical advisor Pöyry, and legal advisor White & Case.
The plant will be built by Harbin Electric and Alstom. Alstom will lead the EPC consortium and will be responsible for the overall engineering, the supply and eventual commissioning of the Power Block, and coordinating the balanced integration of all the plant's components and guarantee the power plant's performance. The plant will be operated and maintained by ACWA and Harbin in partnership with Alstom Power and US-based NRG. The coal-handling and trans-shipment facilities will be managed by Louis Dreyfus, a major European specialist company. France's EDF Trading, one of the world's largest coal traders, will manage the coal supply to the plant.