UAE awards $1.3bn plant deal

Picture for illustrative purpose (GETTY IMAGES)

A consortium grouping Korea Electric Power Corp (Kepco) and Japan's Sumitomo Corp. has signed a $1.43b deal to build a thermal power plant in the UAE, the South Korean firm said on Wednesday.

Under the deal with the Abu Dhabi Water and Electricity Authority (Adwea), the consortium will construct a gas thermal power plant in Shuweihat city, 260 km west of Abu Dhabi, Kepco said in a statement.

Meanwhile, South Korea's Daewoo Engineering & Construction Co too announced that it was part of the deal, winning a $650.3 million project to build the UAE plant as part of a South Korean-Japanese consortium.

Daewoo said in a statement that the deal was part of a $1.13 billion project that Kepco and Sumitomo had won from an Abu Dhabi government agency. The company did not elaborate on the difference in the value of the overall project.

The consortium will raise funds through borrowing from South Korean, Japanese and other foreign banks by May and the plant will be completed in March 2014.

The costs will be recovered by selling electricity produced at the plant to Abu Dhabi Water and Electricity Co, a wholly owned unit of Adwea, for 25 years.

The consortium was picked as preferred bidder for the plant last October. A Kepco-led consortium also won a $20.4 billion deal in 2009 to build four nuclear power plants in the UAE.

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