ABU DHABI: Abu Dhabi plans to invite firms in March to submit proposals to build a 1,600 megawatt power plant worth about $2 billion, a government official said on Sunday, as the emirate looks to meet tripling demand by 2020. Water and electricity demand in Abu Dhabi, one of seven members of the United Arab Emirates (UAE) federation, is expected to rise 7 to 8 percent a year over the next five years. Demand is growing quickly as the world’s third-largest oil exporter builds infrastructure and industry to diversify away from dependence on petrodollars. 

“We have started the process of prequalification and we are targeting sending the request for proposals early next month,” said Abdulla Saif al-Nuaimi, director of privatization at the Abu Dhabi Water & Electricity Authority (Adwea). “We expect to finalize selection of the developer by November this year, [make the] financial close by April 2011 and commissioning in summer 2013,” he told Reuters in an interview. 

The Shuweihat 3 independent power project (IPP) will be the emirate’s ninth power project under a privatization plan launched in 1998, under which international developers take a stake in the project. 

Under the IPP model, foreign investors operate the plant. 

The UAE has embarked upon a nuclear program to try to meet spiraling electricity demand. In December, it awarded a deal worth up to $40 billion, one of the largest ever awarded in the Middle East, to a South Korean consortium to build and operate four nuclear reactors in the Gulf Arab country. 

Abu Dhabi holds most of the United Arab Emirates’ crude reserves and oil revenues have helped it avoid the worst of the global economic slowdown, as well as the debt crisis that has hit neighboring emirate Dubai. 

Shuweihat 3 will be Abu Dhabi’s first IPP. The previous eight projects are all independent water and power projects. Adwea decided not to include water desalination at Shuweihat 3 to save on investment in water pipelines and for technological reasons, Nuaimi said. 

The selected international developer would take a 40 percent stake in the plant, with Adwea taking the remaining 60 percent, he said. Financing would be a combination of debt and equity. 

Foreign companies such as General Electric Co, Mitsubishi Corp, Suez Tractebel (part of France’s Suez Energy International), Hyundai Heavy Industries and International Power plc have all previously shown interest in power contracts in the region.