Harbin, Acwa to build $1.8b plant in Dubai

Saeed Mohammed Al Tayer and other officials at a Press conference to announce the preferred bidder for Hassyan Clean Coal Project Phase I in Dubai on Tuesday. - Supplied photo

Dubai Electricity and Water Authority (Dewa) on Tuesday announced its preferred bidder for the first phase of the 1,200 MW Hassyan clean coal power project.
A consortium including China's Harbin Electric and Saudi Arabia's ACWA Power to build and operate the $1.8 billion plant, the Dubai utility's managing director and chief executive officer Saeed Mohammed Al Tayer disclosed the name at a news conference in Dubai.
The consortium bid to provide electricity at a levelised cost of 4.501 US cents per kilowatt hour based on May 2015 coal prices, Al Tayer said.
Dewa will be the major stakeholder with a 51 per cent share in the plant and invest $200 million. The state utility chief said regional and international lenders will be approached for the 78 per cent of the project's total cost.
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, Paddy Padmanathan, chief executive of ACWA Power, told reporters on Tuesday on the sidelines of the news conference.
"This project supports the Dubai Plan 2021 to for Dubai's environment to be clean, healthy, and sustainable. Today, Dewa is adding another initiative to diversify Dubai's energy mix and support the Dubai Integrated Energy Strategy 2030 developed by the Dubai Supreme Council of Energy to diversify Dubai's energy mix to include 71 per cent from gas, 15 per cent from solar power, seven per cent from clean coal, and seven per cent from nuclear power," Al Tayer said.
"To achieve Dewa's vision to become a sustainable world class utility, we are working to establish sustainability, which is a roadmap for a brighter and happier future for Dubai, by launching distinguished world-class initiatives and projects in green development. 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," he said.
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. Dewa is planning to launch two additional projects, to bring the total capacity to 3,600 MW.
Al Tayer informed that Dewa received expressions of interest from 48 international applicants. Seven global developers were shortlisted and found to have the capabilities to deliver. Dewa received four offers from international companies and consortia that possess the necessary expertise and skills. After an intense bidding competition and a rigorous evaluation of the bids received, supervised 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.
- abdulbasit@khaleejtimes.com