Qatar Electricity & Water Co. (QEWC)

Mitsui to buy 20% stake in US$3.9bn Qatar power and desalination project

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Source: Qatar Electricity & Water Co. (QEWC)

Mitsui & Co., Ltd. ('Mitsui') announced yesterday that it has entered into a joint venture agreement with Qatar Petroluem, Qatar Electricity and Water Company and Suez in regard to establishing a project company ('Company') for a power generation and desalination project in Qatar's Ras Laffan Industrial City. The Company will construct a new power generation and desalination plant with a capacity of 2,730 MW plus 63 million gallons of fresh water per day and provide electricity and desalinated fresh water with Kahramaa (Qatar General Electricity and Water Corporation) for 25 years. The total project cost is approximately US$3.9 billion (approximately 80% of the total cost is expected to be financed by syndicated banks on a limited recourse loan basis).

In April of this year, the Company will conclude a power and water purchase agreement and an engineering, procurement and construction contract and will start Commercial operations will start from April 2011.

In Qatar, Mitsui has participated in energy related projects, such as Qatargas 1 and Qatargas 3 LNG projects and Laffan Refinery project. Under the rapid economic growth in the Middle East region, Mitsui positions infrastructure projects in this area as significant field and aims to develop new energy related infrastructure projects utilizing its experience.

Project Summary

Investors Qatar Petroluem: 15%
Qatar Electricity and Water Company: 45%
Mitsui: 20%
Suez: 20%
Business details Construction, maintenance, operation of a power generation and desalination plant and wholesale (BOOT method) of electricity and desalinated fresh water
Plant capacity Gas fired combined cycle power generation plant : 2,730 MW Seawater desalination plant : 63 MIGD
Project period 25 years from completion of plant construction (plant construction period: approx. 3 years)
Buyer Kahramaa
Total project cost Approx. US$3.9 billion
Funding Equity participation and limited recourse project finance
Schedule April 2008 : Power and water purchase agreement, engineering, procurement and construction contract, etc. concluded
End of May 2008 : Finance close scheduled
April 2011 : Plant construction completed, commercial operations commence 
Construction site Ras Laffan Industrial City, Northern Qatar

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