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Utico Middle East, the UAE’s privately owned utility, has announced a US$185mn investment to double its water desalination capacity in two years
Towards the end, the company is building a new plant and upgrading two existing plants. The new plant, which will have a capacity of 24mn gallons per day (mgpd), is under construction in Ras Al Khaimah, in a joint venture with Spain’s Grupo Cobra, for an investment outlay by the partners of US$196mn.
The upgrades on Utico plants with investment of US$68mn is expected to add a total of 10 mgpd, managing director Richard Menezes told reporters.
“The new plant as well as the two upgrades will be operational at full capacity by October 2018, when Utico’s total capacity will be 65 mgpd,” he said.
The plants will be funded partly through a US$150mn club loan from three local banks – Emirates NBD, National Bank of Abu Dhabi and Commercial Bank of Dubai – and the remainder through equity, Menezes said. He added that an infrastructure fund incorporated in the Bahrain Financial Centre is taking a minority stake in Utico valued at around US$50mn.
The company has also won regulatory approvals to build a clean coal power plant in Ras Al Khaimah at an estimated cost of US$500mn in a joint venture with Shanghai Electric Group.
Demand for water and power in the UAE is expected to grow by 5 to 6 per cent annually in the next few years, according to estimates by state-owned utilities. The majority of the country’s water desalination and power generation capacity is accounted for by the state owned utilities. Utico believes that with this new move it will be able to widen its market reach.