Marubeni wins power, water project in United Arab Emirates

Aug. 2, 2007 -- Marubeni Corporation has successfully won the right to build, own and operate the Fujairah 2 power and water project in the Emirate of Fujairah in the United Arab Emirates ("U.A.E."). The 20-year power and water purchase agreement ("PWPA") was officially signed with Abu Dhabi Water & Electricity Authority ("ADWEA") on Aug. 1, 2007.

Marubeni formed a consortium with International Power plc ("IPR") for the international competitive bid solicited by ADWEA in April 2007 and has negotiated with ADWEA since it was nominated to the 1st ranked bidder in June 2007.

With a total project cost of USD 2.8 billon, inclusive of the costs of constructing power generation and seawater desalination plant, it is the largest newly constructed independent water and power projects ("IWPP") in the U.A.E.. After the signing of the PWPA, a new project company will be set up with the Marubeni-IPR consortium having a 40% stake and ADWEA retaining a 60% stake. The new project company will conclude negotiations for loan agreements and start the construction in December 2007. Commencement of the commercial operation is anticipated in 2010.

Some USD 2.2 billion of the total financing requirement will come from a project finance loan. Marubeni-IPR consortium is negotiating with international commercial banks including Sumitomo Mitsui Banking Corporation of Japan, Calyon of France and Citibank N.A. of United States of America. In addition, Japan Bank for International Cooperation ("JBIC") is also expected to support this project.

The project includes the construction of 2,000MW power and 130 MIGPD seawater desalination plant to be supplied by Alstom of France and Switzerland and Societe International de Dessalement of France respectively. All production capacity will be sold under the 20-year PWPA to the Abu Dhabi Water and Electricity Company ("ADWEC"). Marubeni-IPR consortium will also carry out the operation and maintenance of the plant. The plant will utilize the latest combined cycle power technology and hybrid water desalination technology which combines multiple effect distillation system and reverse osmosis system to maximize efficiency and minimize gas consumption and emission of CO2.

The high overall evaluation reflected not only the competitive purchase price of power and water but also Marubeni's global I(W)PP experience and reputation. Marubeni has successively won the right to build, own, operate power and water projects in the Gulf Region from 2004. This project is Marubeni's fourth large-scale I(W)PP project in the region.

The United Arab Emirates is one of the most resource-rich countries in the world. It boasts the world's third-largest deposits of crude oil and the world's fifth-largest deposits of natural gas, much of which is exported to Japan. It maintains a high investment rating of Aa2 assigned by Moody's. Since the 1990s, the UAE has been actively promoting private capital projects. Its foreign-backed power and water projects are regarded as ground-breaking transactions in the Middle East. A large number of similar private capital projects are expected to be launched in this region in order to correspond to increasing demand for power and water. Marubeni will selectively pursue the business opportunity which is supported by long term purchase agreement and reliable performance guarantee and expand I(W)PP businesses in the region.

Marubeni is expanding I(W)PP businesses not only in the Middle East but also in Asia and America. Marubeni's power assets all over the world will become 17,500MW (gross amount) 5,780MW (net amount) including this project.

Also see:
-- "Marubeni Completes Acquisition of Mirant's Caribbean Business"

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