Overview
Our project consists of power generation and seawater desalination plants in Abu Dhabi with 1,600 MW of contracted power capacity (comprising 1,240 MW combined cycle power generation capacity and 360 MW open cycle power generation capacity) and 52.5 MIGD of contracted water capacity (comprising 30 MIGD of reverse osmosis (“RO”) desalination capacity and 22.5 MIGD of MSFD desalination capacity). Most of our plant was new when constructed, although certain existing facilities forming part of an existing power generation and seawater desalination plant at the site were transferred to us, including uninstalled OCGT packages and existing open-cycle inventory to be used for the implementation of new OCGT units and the MSFD desalination plant. We also acquired and refurbished certain existing shared facilities, such as the seawater screening and pumping station, the seawater chlorination and switchgear building, the demineralization plant, and the remineralization plant. Our project entered into full commercial operation on October 18, 2017.
We generate our revenue pursuant to the PWPA with our Offtaker, EWEC, which is indirectly wholly owned by the Government of Abu Dhabi. The terms of the PWPA provide that our power generation and water production capacity is sold exclusively to EWEC on a long-term take-or-pay basis. The power and water that we produce is used to meet the growing power and potable water demands of Abu Dhabi.
We are incorporated as a private joint-stock company (sharikah mussahimah khassah) duly organized and existing under the laws of the UAE and Abu Dhabi. We are:
→ 60% owned by the Local Shareholder, which in turn is owned by our Local Sponsor, TAQA, which is ultimately 98.6% owned by the Government of Abu Dhabi;
→ 20% owned by one of our International Shareholders, M Power Holding Limited, which in turn is indirectly wholly-owned by one of our International Sponsors, ENGIE; and
→ 20% owned by our other International Shareholder, Sojitz Global Investment B.V., which is in turn wholly owned by our other International Sponsor, Sojitz.
Our plant site is located at the Mirfa Complex, five kilometers west of the town of Mirfa, about 100 kilometers southwest of the city of Abu Dhabi on the Arabian Gulf coast of the UAE. A map of the UAE showing the location of the Mirfa Complex in Abu Dhabi is shown below.
We anticipate that we will share common infrastructure facilities at the Mirfa Complex with new generation/desalination plants which might be developed on the Mirfa Complex. This is due to site-specific conditions and logistical efficiency. The common facilities would include (among others): the seawater intake structure and wave breaker; the oil bubble barrier system; navigation buoys; a fire station; and common roads, entrance facilities, fencing, and lighting. These common facilities are currently owned by the SF Company which is jointly owned by us and ADPower.
The Operator, M Power O&M FZCO, is a special purpose company with limited liability duly organized and existing under the laws of the Jebel Ali Freezone located in Dubai, with its principal office at Jebel Ali Freezone, Office No. TPOFCB 0340. The Operator is wholly owned by Kaharabel FZE which is in turn wholly owned by ENGIE through intermediate holding companies (including International Power SA and Electrabel SA). ENGIE, which is rated Baa1 by Moody’s, BBB+ by S&P, and A- by Fitch, is one of the leaders in power and water generation in Asia, the Middle East, and the Africa region. The Operator is managed locally and our project benefits from the expertise and procedures of our Sponsors who are well-established companies in the region.
In addition, certain maintenance services in respect of gas turbines that form part of our project are provided by the CCGT Contractor, a company duly organized and existing under the laws of Italy, and the OCGT Contractor, a company duly organized and existing under the laws of The Netherlands.
The combined cycle power generation, open cycle generation, and seawater desalination technology employed in our plant is a proven technology that has been implemented globally on numerous projects. The power plant consists of four 90 MW GE 9E open cycle gas turbines and three Ansaldo AE94.3A gas turbines connected with dedicated heat recovery steam generators (“HRSGs”) and two steam turbines. Ansaldo AE94.3A GTs are equipped with bypass stacks and dampers for either simple (open) or combined cycle mode of operation.
The GE PG9171E (Frame 9 model) gas turbines used in the OCGT element of our project have been in operation in other plants for in excess of 25 years, with over 350 turbines currently in operation globally. With more than 4 million equivalent operating hours accumulated and more than 80 units in Ansaldo’s fleet, the AE94.3A is widely used for similar IWPPs in the region (source: Ansaldo’s website). The Ansaldo gas turbines and steam turbines used in the CCGT element of our project have been in operation in other plants for more than 18 years and 20 years, respectively.
The desalination units in operation consist of three 7.5 MIGD MSFD units supplied by Fisia Italimpianti, which is one of the major suppliers of large capacity MSFD units and has significant experience relating to projects in the Middle East. The MSFD design has historically been widely used in the Middle East. The RO plant consists of a 30 MIGD RO unit supplied by Degrémont, which has over 50 years of experience using RO technology. Given recent technological advancements, cost competitiveness, and operational flexibility, RO technology has now become the desalination technology of choice in the GCC.
We are integral to meeting Abu Dhabi’s power and water demand and represent a key part of its successful privatization strategy for the power and water sectors. The Government of Abu Dhabi, through EWEC and its predecessor, ADWEA, implements the Privatization Program.
We benefit from contractual and other support from the Government of Abu Dhabi and the entities owned by it. Under our PWPA, EWEC is obliged to pay capacity payments for 100% of the available power and water capacity of our plant, regardless of the dispatch level instructed by TRANSCO. Deductions are made from the capacity payments only to the extent that our plant units are either not available or reduced in their availability pursuant to the terms of the PWPA. The capacity payments are calculated so that they cover the capital cost incurred in developing and constructing our project, fixed operating and maintenance costs, such as insurance costs, staff costs and spare parts costs, our senior debt service, and an equity return to our shareholders. In addition to these capacity payments, we also receive output payments to cover the variable costs of our production and supplemental fee payments for other project-specific costs.
Our Strengths
We believe our four fundamental strengths are as follows:
· Critical infrastructure for the UAE
· Established Contractual Framework with Robust Risk Mitigation and Significant Government of Abu Dhabi Links
· Capable and Experienced Management Supported by Sponsors with Aligned Interests
· Proven and Established Technology
· Robust Financial Structure
Our Shareholders
Below is a short summary of each of our Shareholders and certain of our other indirect holding companies.
Local Shareholder — Mirfa Power Holding Company
Mirfa Power Holding Company (the “Local Shareholder”) was incorporated as a public joint stock company under the Federal Laws and the laws of Abu Dhabi and is registered in the commercial register of Abu Dhabi under number CN-1833922 with its registered office in the city of Abu Dhabi in the Emirate of Abu Dhabi.
The Local Shareholder is 100% owned by TAQA. The Local Shareholder has a 60% ownership interest in us, resulting in TAQA having a 60% indirect ownership interest in us.
International Shareholders — M Power Holding Limited and Sojitz Global Investment B.V.
M Power Holding Limited (the “Mirfa Offshore Holding Company”) is a company incorporated in Jebel Ali Free Zone in Dubai on June 20, 2013 under company number: 159666 whose registered office is at Ince & Co Middle East Dubai Branch, The Maze Tower, level 10, Sheikh Zayed Road, Dubai, UAE. The Mirfa Offshore Holding Company is wholly owned by ENGIE.
Sojitz Global Investment B.V. (the “Sojitz Holding Company” and, together with the Mirfa Offshore Holding Company, the “International Shareholders”) is a company incorporated in The Netherlands whose registered office is at Strawinskylaan 1241, World Trade Center Tower C 12F, 1077XX, Amsterdam, The Netherlands. Sojitz Holding Company is wholly owned by Sojitz.
Each International Shareholder has a 20% ownership interest in us, resulting in the International Sponsors each having a 20% indirect ownership interest in us.