ACWA Power International (“ACWA Power”), the Saudi Water and Power developer, owner and operator, announces that it has entered into a definite agreement with Summit Global Management VIII B.V. (“Summit Global”), a wholly-owned subsidiary of Sumitomo Corporation (“Sumitomo”), to acquire its 20% stake in Shuweihat CMS International Power Company PJSC (“SCIPCO”), which owns the Shuweihat S1 Power and Desalination Plant (S1 Plant) and its 50% equity interest in the Shuweihat O&M Limited Partnership (“SOMLP”).
The agreement to complete the acquisitions described above is conditional, inter alia, on certain consents being obtained, including those of the lenders to SCIPCO.
The S1 Plant, is a brownfield plant with a net production capacity of 1,500 megawatts of electricity and 100 million imperial gallons of desalinated water a day (454,200 m3/d), located about 250 km southwest of the Emirate of Abu Dhabi and was the third Independent Water and Power Project (“IWPP”) commissioned by Abu Dhabi Water & Electricity Authority (“ADWEA”).The plant began its commercial operation in 2005 under a 20-year off-take agreement from the Abu Dhabi Water & Electricity Company (“ADWEC”). The combined cycle co-generation facility, constructed by Siemens AG, Germany and Fisia Italimpianti, Italy SCIPCO is 60% owned by Abu Dhabi National Energy Company (“TAQA”) and its parent company, ADWEA. The remaining 40% in SCIPCO is equally owned between Sumitomo and International Power / GDF SUEZ. The S1 Plant is managed, operated and maintained by SOMLP (jointly and equally owned by Sumitomo and International Power / GDF SUEZ) pursuant to a 20-year Operations and Maintenance (“O&M”) agreement. The S1 Plant accounts for approx. 12% of the total electricity generation capacity and approx. 11% of the total water production capacity in the Emirate of Abu Dhabi.
Mr. Mohammad Abunayyan, ACWA Power Chairman, stated “This marks ACWA Power’s entry into yet another important market in the GCC, the third country within GCC after our significant positions in Saudi Arabia and Oman. UAE is not only considered to have developed the best IPP/IWPP model across the globe, but also is a matured market and very high investment grade and creditworthy offtake. This investment will enhance the value to the shareholders of ACWA Power and strengthen its position as a major participant in the Power Generation and Water Desalination Market in the MENA region.”
Mr. Paddy Padmanathan, ACWA Power President & CEO, said “The transaction represents a unique prospect for us to participate in the project company and the O&M company of a best-in-class IWPP that represents a strategic asset in Abu Dhabi’s electricity and water infrastructure. It offers ACWA Power an opportunity to add significant capacity to its existing portfolio of power generation and water desalination assets.”
The transaction is expected to close in March 2014, subject to closing conditions. Citigroup is acting as sole financial advisor to ACWA Power.
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