May 14, 2006 Sunday
JOINT ALGERIA, UAE POWER PLANT CONSTRUCTION
LENGTH: 540 words
In order to pool their synergies and enrich their technological experiences and further promote their bilateral relations, Opec Fund Member States the United Arab Emirates and Algeria have embarked on two separate multi-million dollar independent power projects to be constructed in the latter country.
One of the projects, to be sited at Hadjret Ennous in western Algeria, is a $900 million power plant, with a 1,200 MW generating capacity, to be built, owned and operated on the basis of a jointbidding agreement between the Abu Dhabi-based Mubadala Development Company and its partner SNC-Levalin Inc.
In line with the terms of the agreement, Mubadala Development Company and SNC-Lavalin will each invest equal amounts in the power company, thereby enabling them to jointly own 51% majority shares. The balance of 49% will be owned by the Algerian Energy Company which is itself owned by Sonatrach and Sonelgaz. About $650 million of the project's cost "will be raised through financing on a non-recourse basis of 70:30 debt--to-equity ratio.
Expressing his satisfaction with the project, Mubadala Development Company CEO, Khaldoon Khalifa Al Mubarak, remarked that the participation in Hadjret Ennous supported his company's utilities investment strategy for the emerging markets of North Africa. He said his company's bullish approach to Algeria's fast growing energy sector was "our debut venture in the promising North African utilities sector and we seek to use it as a step toward other investment opportunities in Algeria, as it has always been a prime focus of our interest." He added that Mubadala's partnership with SNC--Lavalin in the project was strategic, and would open the door to many opportunities for future co-operation in other markets in the region.
As part of the project package, Sonelgaz will sign an energy con-version agreement with the project company guaranteeing the purchase of the power to be produced by the plant so as to meet Algeria's estimated 4% annual growth in demand for electricity.
The second project in which Mubadala Development Company and SNC-Lavalin s growing are jointly involved is the multi-million dollar, 800 MW power plant which is being constructed by Lavalin in Skikda, eastern Algeria. The two companies are concluding arrangements for the joint acquisition of "a substantial stake in the new combined cycle Skikda plant, which is scheduled to be commissioned in the first quarter of 2006."
Algeria generates over 26 billion kilowatt hours of electricity through conventional thermal sources, of which natural gas accounts for about 98%. Al-though it has exported its excess power supply to Morocco and Tunisia, Algeria's electricity demand is growing so fast that it would need to substantially increase its capacity in the years ahead.
Data Systems. Other activities are in-vestments in nine oil exploration blocks in Libya, a 5% stake in the Italian luxury sport car maker Ferrari, and a 25% stake in the Dutch fleet management giant, Lease Plan Corporation. Mubadala, through a public-private partnership initiative, is also leading the development of the UAE University's new campus in Al Am City.
Courtesy: Opec fund newsletter
Copyright 2006 Business Recorder
LOAD-DATE: May 14, 2006
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Copyright 2006 Business Recorder Source : Financial Times Information Limited
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