Consortium Buys Emirates Power Plant

London -- - Electricity company International Power joined forces with two Japanese companies yesterday to buy a 40 per cent stake in a United Arab Emirates power and water plant from the Abu Dhabi Electricity and Water Authority.

The move is the latest in a string of large infrastructure schemes in the financially sounder countries in the Middle East where a growing population is increasing the need for better water and sewage systems.

The consortium, led by the British firm and including Tokyo Electric Power Company (TEPCO) and Mitsui & Co, has signed agreements to expand the plant and sell the entire power and water output to the Abu Dhabi Water and Electricity Company (ADWEC) under a 23-year deal.

The cost of the project, which will involve developing a new power and water plant alongside the existing facility, will amount to some pounds 1.3 billion, International Power said.

The consortium will contribute a maximum of pounds 112 million, with the remainder funded by debt and cash inflow from the existing plant.

The equity investment will be divided up according to the ratio of interest in the consortium.

Hence, the British firm, which owns 50 per cent, will make a maximum investment of pounds 56 million.

TEPCO owns 35 per cent of the consortium, and Mitsui owns 15 per cent.

The remaining 60 per cent ownership interest in the plant will continue to be held indirectly by the Abu Dhabi Electricity and Water Authority, International Power said.

Japan's fifth-largest trading house, Marubeni Corp, and major builder Taisei Corp last July won a similar order worth pounds 531 million to build pipelines and pumping stations for a major power and water plant in the UAE.

International Power's shares closed up 2p at 97.25p on yesterday's stock market.