GIC-GDF Suez complete Bahrain project financing

DEAL SEALED: GIC-GDF Suez complete financing for Bahrain's Al-Dur water and power producer (IWPP) project. (Getty Images)

Gulf Investment Corporation (GIC), along with GDF Suez, confirmed on Sunday the completion of limited recourse financing for the $2.1 billion Al-Dur water and power producer (IWPP) project - the largest privately-owned industrial project in Bahrain.

GIC has also sold half of its 50 percent stake in the project, while GDF Suez has offloaded 5 percent and remains the biggest shareholder with 45 percent.

Reuters reported the stake buyers were all Bahrain-based. They were the Social Insurance Organization of Bahrain, Instrata Bunya Fund, First Energy Bank, Bahrain Islamic Bank and Capital Management House.

Kuwait based GIC said in a statement that "financing a project of this size is a landmark in the financial markets after the advent of the economic crisis."

In August 2008 the project was awarded to GIC and GDF Suez by Bahrain’s Ministry of Finance.

The project will deliver electricity and water to the Electricity and Water Authority (EWA) under a 25-year power and water purchase agreement (PWPA).

The first phase of the project will start in H1 2010, with full capacity being achieved in summer 2011.

The project consists of a combined cycle gas turbine power plant and a reverse osmosis (RO) technology desalination plant.

The complex will have a capacity of 1,240 MW of power and 218,000 cubic metres p/d (48 million imperial gallons per day) of water. It is the third IWPP being developed in Bahrain.

The EPC contract was awarded to Hyundai Heavy Industries (HHI). General Electric will supply the power plant turbines.

Degremont, a subsidiary of Suez Environment and a specialist in water treatment and desalination, will supply and install the RO desalination facility.

CEO of GIC Hisham Al-Razzuqi said in a statement: "Achieving financial close on a project of this size, in this market, is indeed a great achievement. When the financial crisis hit the world markets, GIC and GDF Suez stood by their commitments in extremely adverse conditions.''

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