Bahrain’s $2.2 billion Al Dur independent water and power project (IWPP) will be commissioned next year. The construction of the 1.234 gigawatt power and 218,000 cu m per day (cmd) water plant will help the kingdom meet the rapidly increasing demand for power and water, Adnan Fakhro, assistant under secretary, Electricity and Water Authority, said.
 “The project is very important to us especially when power demand in the kingdom is rising at the rate of eight per cent every year,” Fakhro said.
“The opening of the GCC Interconnection Authority power grid in April will also help meet power demand. One advantage of the grid is that states can convert their surplus power to money by selling electricity to states suffering scarcity. This would negate the need for each state investing huge sums on power plants,” he explained.
Bahrain also plans to build a number of primary sub-stations to help the distribution system tackle the extra load when more power comes into the system, he added.
Meanwhile, Al Dur is expected to reach financial close at the end of this month (March) after a delay caused by tight international credit market conditions.
Calyon, Mashreqbank and Standard Chartered Bank have announced that they have launched syndication of the financing for the project.
A portion of the debt will be covered by Korean export credit agency Korea Export Insurance Corporation (KEIC).
In addition to the international tranche, there will be an Islamic tranche, a tranche for domestic lenders and a US Exim Bank facility, ranking pari passu with the international tranche.
The project is equally owned by a consortium of GDF Suez and Gulf Investment Corporation (GIC) and benefits from a 20-year power and water purchase agreement with the Electricity and Water Authority of Bahrain (EWA). The EPC contractor is Hyundai Heavy Industries.
The construction schedule was adapted to the new timetable, but Hyundai Heavy Industries has already started work on the site and works are currently being funded by the sponsors.
As in other Gulf states, Bahrain is facing a power and water crunch and has redoubled efforts in recent years to catch up with demand.
An increase in population, coupled with greatly expanded industrial facilities, new infrastructure including a new port and new hubs such as the Hidd Industrial City and the Bahrain International Investment Park, has prompted the Government to make large-scale and essential investments in the power and water sector over the years.