Project partners for Fujairah 2 have signed a 20-year power and water purchase agreement (PWPA) with the Abu Dhabi Water and Electricity Company (ADWEC) for the plant's entire output.
International Power, Marubeni Corporation and the Abu Dhabi Water and Electricity Authority (ADWEA) will own the project company, to be known as the Fujairah Asia Power Company.
International Power has a 20% equity interest, with 60% held by ADWEA and 20% by Marubeni. The facility will be operated by a 50:50 joint venture between International Power and Marubeni.
The total project cost is estimated to be US $2.8 billion, which will be funded by a mix of debt and equity in an 80:20 ratio. For its 20% share, International Power's equity investment will be US $112 million.
Philip Cox, chief executive of International Power, said, "We are very pleased to have signed this agreement, as the Fujairah 2 project builds on our growing portfolio in the Middle East, where we have significant greenfield development and operational experience."
The Fujairah 2 independent water and power project (IWPP) is itself a greenfield development project and will produce 2 000 MW of power and 130million imperial gallons per day (MIGD) of water, using mostly multi-effect distillation, upon its completion.
Fuel will be provided by ADWEC in the form of natural gas on a pass-through basis under the PWPA. The project is expected to be fully operational by the end of 2010, while financial close is expected by 31 December 2007.