Utilities

GCC joint power grid project launched

Leaders of the Arab Gulf countries officially launched a project to link their power grids yesterday, a venture that aims at providing electricity in a sustainable and competitive manner. Leaders of Kuwait, Saudi Arabia, Bahrain, Qatar, the United Arab Emirates (UAE) and Oman signed documents virtually on computer screens at Bayan Palace that will pave way for the official launch of the first phase of the electricity linkage project. Kuwait's Deputy Premier, Minister of State for Development and Minister of State for Housing Sheikh Ahmad Fahd Al-Ahmad Al-Sabah said the project will be among vital clean energy resources for the GCC countries and will have huge economic benefits as well as contribute to achieving an energy strategic reserve because it depends on the exchange of electricity among the six GCC members. This project, he added, would help fill any shortage in electricity supply under any circumstances, citing successful tests. Sheikh Ahmad said the project would be linked with Arab power link ventures in future. The first phase of the project, to cost US$1.21 billion, will include Kuwait, Saudi Arabia, Qatar and Bahrain. A second phase will be designed to put in place infrastructure of the power grids in the UAE and Oman to enable them to join the third phase which will ultimately hook all six GCC countries though a single network in the second quarter of 2011. The total cost of the electricity linkage project is estimated at US$1.6 billion.

RAK: Power play

As demand continues to rise, Ras Al Khaimah (RAK) is looking to bolster its power infrastructure. With plans for several new power plants under way, the emirate is following a strategy that utilizes both traditional and sustainable energy sources, falling in line with global trends to maintain efficiency and respecting environmental concerns. The need for greater power capacity was highlighted this summer, with power cuts regularly affecting areas in the northern emirates. Sharjah was most affected by the cuts, but regular power and water outages were also reported in RAK by local media. Peak energy demand coincides with the hot summer months and people turning to their air conditioning units. Electricity infrastructure throughout the region is straining to keep up with the demands of growing populations and industrial activity in recent years. While RAK has a relatively small population - at an estimated 231,000 - its industrial sector is coming into its own. The RAK Free Trade Zone (RAK FTZ), for example, enjoyed steady growth through both 2008 and 2009, defying global recessionary trends. It hosted close to 5500 companies at the end of last year and has sought to add another 2000 by the end of this year. It had recruited 900 new companies by the end of the first half. Greater capacity is on the way. In April the Federal Electricity and Water Authority (FEWA) announced plans for a 10m-gallon-per-day desalination plant in RAK scheduled for completion in 2011. (OBG)

Egypt nitrogen firm raises US$1.05bn loan

The Egyptian Nitrogen Products Co has raised US$1.05 billion in a syndicated loan to build a fertilizer plant, one of its two lead advisers said. The plant, which will cost US$1.7 billion to build, will produce 3,850 tons per day of urea and 2,400 tons per day of ammonia, said Beltone Financial Holding. Four Egyptian banks underwrote and marketed the loan: National Bank of Egypt, Banque Misr, Arab African International Bank and Banque du Caire. Egyptian Nitrogen Products is owned by Egypt's MOPCO. The plant will be built in Damietta on Egypt's north coast near Port Said.

AES to sell equity interests in Oman and Pakistan businesses

US-based power utility AES has entered into agreements to sell its entire interests in its Oman and Pakistan businesses for approximately US$200 million. As a result of the transactions, US$276 million of non-recourse debt will remain at the Oman and Pakistan businesses and will be removed from AES's consolidated balance sheet. The transactions are subject to customary purchase price adjustments and approvals and are expected to close during the first half of 2010. The businesses are being sold to two separate buyers as a result of an auction process that began in the second quarter of 2009. AES indirectly holds interests in the Oman and Pakistan facilities through AES Oasis, which is owned 61.1 per cent by AES and 38.9 per cent by the IDB Infrastructure Fund.

Dubai utility says borrowings not in default

State-owned Dubai Electricity & Water Authority (DEWA) said that none of its borrowings were in default and its lenders had confirmed the continuation of its facilities. "None of DEWA's borrowing are in default and... we have unequivocal confirmation from lenders of the uninterrupted continuation of our facilities (and) our facilities are guaranteed by (the) Government of Dubai which owns and fully supports the authority," it said in a statement. A spokesman from the utility firm rejected a report that credit downgrades of government-owned firms could lead to an accelerated payment clause for US$2 billion of its debt.

Egypt's OCI JV wins US$393m water plant contract

Egypt's biggest listed builder Orascom Construction Industries (OCI) won a US$393 million contract to build piping and other infrastructure for a water treatment plant near Cairo, it said. OCI said its share of the deal, worth more than the contract for the plant itself, is US$196 million. It won the contract in a 50-50 joint venture with Egyptian firm Hassan Allam Sons. The deal bolsters OCI's backlog of state-funded infrastructure projects, which has swollen since Egypt accelerated infrastructure spending under a stimulus plan this year.