In an unprecedented participation for independent water and power projects in the UAE, the tenders for two high-profile utilities projects in Ras Al Khaimah have attracted over 116 companies from 15 countries since the announcement of the projects in early January.
The tenders call for the construction of a water desalination plant which will deliver an output of 22 million gallons per day and a power plant that will generate 40 MW per hour once operational.
Companies from the United States, Europe, Japan, China, India and the Middle East are in the race for the projects, with GDFSuez, Elf Energy, Abengoa (which has built Shams Energy), and ACWA Power among the top international bidders. The tender is expected to be wrapped up in the third quarter of this year.
The tender prequalification process is being managed by Latham and Watkins and features independent auditors and finance advisors and management consultants.
The projects are being developed on a 20-year guaranteed off-take agreement by Utico, the region’s largest private utilities company. As per the terms of the contract, 40 per cent will be funded by the successful bidder, with the remaining 60 per cent being funded by Utico.
The projects are being developed to meet the rapid growth of Ras Al Khaimah and surrounding emirates.
The projects are modelled to set a precedent for the UAE, resulting in lowering or completely wiping out subsidies as prevalent along with lowering consumer pricing.
Richard Menezes, Utico’s Vice-Chairman, said that energy management was not a target audience or government problem, but is also an entire value chain holistic initiative that eventually only benefits the consumer paying the bill.
“Total participation is the only answer, starting from the government to the consumer and everything in between,” he pointed out.
Utico’s model of utilities development is supported by Ras Al Khaimah and its progressive ideas of sustainability – an important reason that has helped Utico introduce these innovative projects.
The solar independent power project (IPP) will provide power to the desalination plant as well as provide power to the Utico grid.
Negotiations are also underway to connect to the federal grid, which will help Utico to increase the solar power capacity to 120MW over the coming years.
Utico has already announced several environment-friendly projects, including the 270MW clean coal power project, 40MW solar project, 100,000m3/day largest solar-powered desalination plant projects and several other innovative utility development models which are sustainable.
Recently, Utico received the award for the most Environment-Friendly Company” given by the UAE Ministry of Environment and Water Resources.