Up to 18 developers will be invited to participate in the Hassyan 1 Independent Power Project (IPP), the Dubai Electricity and Water Authority (DEWA) said on Monday.
Hassyan 1 will be built in Dubai's Jebel Ali Free Zone and will, once completed, generate 1500MW of power and will also produce up to 120m gallons of fresh water per day through its associated desalination plant.
The developers were selected on the basis of the Statement of Qualification (SOQ) received by DEWA from 20 developers after the authority and its advisor issued a Request for Qualification (RFQ) to 27 developers who had showed their interest in the project.
“The request for proposal (RFP), will cover general instructions to the bidder, minimum functional specification, shareholder agreement, power purchase agreement, as well as the DEWA IWPP Code,” Saeed Mohammad Al Tayer, managing director and chief executive officer of DEWA, said.
“The successful bidder (being a developer of forming a developer consortium) will ultimately own 49% of a special purpose company which will be formed to own the Hassyan 1 Project. The balance of 51% will be owned directly or indirectly by DEWA,” he added.
The offers are expected to be submitted by October 2011 and the PPA with the successful bidder is expected to be signed by the end of the year.
Over the last few years, Dubai has established the required regulatory framework for independent power projects, such as a regulatory service bureau. In addition, the authority issued decrees amending the existing regulations to allow for the greater participation of private developers in Dubai’s electricity and water sector.
The move to involve the private sector comes as Dubai, and the GCC region as whole, struggles to cope with an unprecedented increase in energy demand from a rapidly expanding population and growing economies.