Boston, MA -- (SBWIRE) -- 12/26/2012 -- BMI View: Abu Dhabi did not let water policy drift over the traditionally quiet summer months, and the confirmation of the plans for a new independent water and power project (IWPP) at Mirfa is a tonic for the sector and for international developers looking for project opportunities in the UAE. It remains to be seen what approach Dubai will adopt over our five-year forecast period; the emirate's economy is starting to revive after a troubled three years, following the Dubai World debt crisis. Water demand should start to regain its historic trend, and the emirate's authorities will need to find a solution to how it wants to finance the necessary investment.

Key themes to highlight for UAE's water sector:

- After some mixed news for privately financed power and water projects in the UAE - headed by Dubai Electricity & Water Authority's (DEWA's) controversial cancellation of an independent power project (IPP) early in 2012 - the announcement of a new independent water and power project in Abu Dhabi will restore some confidence among private water developers. The new IWPP at Mirfa, sponsored by Abu Dhabi Water & Electricity Authority (ADWEA), will have a 53mn gallons-a-day (g/d) water desalination capacity, as well as 1,500 megawatts (MW) of electricity generation. A 40% stake will be offered to the successful foreign bidder, with a plant completion deadline set for 2016.
- ADWEA is refinancing the debt on the Suweihat II IWPP, with plans to issue an US$800bn bond, which would be used to repay some of the bank loans ahead of schedule, and then secure new loans at lower interest rates. Some lenders are expected to accept repayment terms rather than commit to lower interest rates.
- In summer 2012, the UK's Mott MacDonald won an estimated AED2bn consultancy contract for services on building a pumping station as part of ADSSC's Strategic Tunnels Enhancement Programme (Step). The pumping station will have a 3.3mn m3/d capacity, which will assist ADSSC complete the upgrade of the emirate's sewage system.
- Dubai invited bids for an extended 26 August deadline on a contract to build water reservoirs with a 120mn gallon capacity at Lusaily. Bidders are mainly Gulf and Indian firms. Another 120mn gallon reservoir at Ghafat is due for completion in 2012.

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