UAE utilities authorities call for greater private sector role in power generation

Abu Dhabi Water and Electricity Company & Dubai Electricity & Water Authority emphasizes critical role of independent companies in upgrading utilities infrastructure

Increased participation by independent private companies in the UAE’s utilities sector will play an important role in the coming years as the country explores ways to meet its growing power requirements, according to the UAE’s utilities authorities.

“The UAE has seen double-digit increase in the demand for electricity in the past few years and is expected to continue seeing rapid growth in the coming years,” said H.E. Dr. Matar Al Neyadi, Undersecretary at the UAE Ministry of Energy . “In order to meet this demand, the UAE has allowed private power and water companies to participate in its energy sector for a number of years. More recently, due to the rapid growth in demand for power and water in the country, Dubai and the federal government have both launched initiatives to permit private sector participation in the generation of electricity and water.”

Al Neyadi was speaking at the opening of the 3rd Annual Global Independent Water and Power Projects (IWPP) Summit in Dubai today. The two-day event features government authorities, policy-makers, regulatory authorities, utilities companies, financial institutions and technology leaders and supported by the Government of Dubai, UAE Ministry of Energy , Dubai Electricity & Water Authority (DEWA) and Utico Middle East, the region’s largest private full-service utilities provider.

“With Dubai poised to host Expo 2020, the demand for upgrading our power and water infrastructure is reaching new heights. Expo 2020 will launch the UAE on the world stage and will also recognise its efforts to promote energy efficiency and sustainability,” Al Neyadi added.

The involvement of independent utilities companies was also playing an important role in boosting the UAE’s non-oil economy. H.E. Mohammed Bin Jarsh, Managing Director of Abu Dhabi Water and Electricity Company ( ADWEC ), pointed out in his keynote address that Abu Dhabi’s IWPP programme has resulted in Dhs7.5 billion of foreign direct investment into its power and water sectors recently and over Dhs250billion since the inception of this program.

“This investment has effectively delivered reliable power and water generation capacity that has kept pace with year on year demand growth of close to 10% since privatization,” Bin Jarsh said. “Abu Dhabi’s IWPP program is well respected and now attracts multiple international bidders for new projects as well as typically being oversubscribed in debt markets which have been used to fund over Dhs47 billion of project cost at highly competitive rates.”

Bin Jarsh added that such investments would provide additional social and economic benefits to the country. “New employment opportunities and enhanced standing on the world and regional political stage will likely provide additional value to investment in new energy and water related technologies and may serve to offset some of the utility sector’s traditional reticence to adopt new technologies,” he said.

Pointing out that interesting times lay ahead for the region’s utilities sector, Bin Jarsh said, “Nuclear power, renewable energy, and the decoupling of water and power production – all look set to have a transformational effect on the way power and water are produced in the future whilst the detailed business cases and decisions that will result in that portfolio are already being made today.”

In his address, H.E. Saeed Mohammed Al Tayer, Managing Director and CEO of Dubai Electricity and Water Authority (DEWA), said, “DEWA encourages such partnerships in the energy sector based on the Independent Power Producer (IPP) model, such as in the Mohammed bin Rashid Al Maktoum Solar Park, and the Hassyan Clean-Coal Power Plant.”

“DEWA has also called for wide international participation in the energy sector. This was demonstrated by the trust and interest of international investors in large-scale projects that are supported by the Government of Dubai,” he added.

Organised by Fleming Gulf, the summit focusses on the issues and challenges affecting IWPPs across the globe. Speakers include top officials from Abu Dhabi Water and Electricity Company ( ADWEC ), DEWA, Sharjah Water & Electricity Authority (SEWA), Dubai Aluminium (Dubal), Masdar Institute, Regulation & Supervision Bureau, Water & Electricity Company (KSA), Ras Laffan Power Company (Qatar), Shamal Azzour (Kuwait), National Electricity Power Company (NEPCO-Jordan), Public Utilities Commission (Sri Lanka), among others.