GDF SUEZ, Gulf Investment Corporation achieve financial close on Al Dur Independent Water and Power Project

Published July 26th, 2009 - 10:45 GMT

Gulf Investment Corporation (GIC) and GDF SUEZ have completed the limited recourse financing of the $2.1 billion Al-Dur Independent Water and Power Producer (IWPP) project (the Project), the largest privately-owned industrial project in Bahrain.  Financing a project of this size is a landmark in the financial markets after the advent of the economic crisis.


On the 28th of August 2008, the Project was awarded to GDF SUEZ and GIC by the Bahrain Ministry of Finance following an international competitive tendering process. A short-term innovative financing solution was put into place due to the global financial crises and the adverse lack of liquidity. GIC and GDF SUEZ upheld their commitment to the Government of Bahrain and equally-funded project work, where the Project is presently almost 30% completed and is expected to meet the target completion dates agreed with the Government of Bahrain.


The Project will deliver electricity and water to the Electricity and Water Authority (EWA) under a twenty five-year Power and Water Purchase Agreement (PWPA).  The first phase of the Project will start early in the summer of 2010, with full capacity being achieved in summer 2011. The Project consists of a Combined Cycle Gas Turbine power plant and a Reverse Osmosis (RO) technology desalination plant. The complex will have a capacity of 1,240 MW of power and 218,000 cubic metres per day (48 million imperial gallons per day) of water. The Project is the third IWPP being developed in the Kingdom of Bahrain.


The EPC contract was awarded to Hyundai Heavy Industries (HHI). General Electric will supply the power plant turbines. Degremont, a subsidiary of SUEZ ENVIRONMENT and a world leader in water treatment and desalination, will supply and install the RO desalination facility, which is highly flexible, efficient and environmentally friendly.


Guy Richelle, CEO of GDF SUEZ Energy Middle East-Asia & Africa commented: “The success of this major finance agreement, the first to be finalized in the Gulf this year, is strong evidence of the confidence of the banking community in the strength of the consortium and the economic development of Bahrain. We are proud that together with GIC, we have been able to contribute to the timely completion of the project by providing the interim financing and the necessary guarantees in a time of significant uncertainty, which is a strong testimony to our respective commitment to the Kingdom of Bahrain and to the region”. 


A group of five prominent institutions have entered as new shareholders in the project. The Social Insurance Organization of Bahrain, Instrata Fund, Capital Management House, Bahrain Islamic Bank and First Energy Bank have joined GDF SUEZ and GIC in the project, where GDF SUEZ will remain the largest shareholder with a 45% stake.


Mr. Hisham Al-Razzuqi, CEO of GIC stated: "Achieving financial close on a project of this size, in this market, is indeed a great achievement. When the financial crisis hit the world markets, GIC and GDF SUEZ stood by their commitments in extremely adverse conditions. We committed considerable resources and were determined to see this project completed on schedule. We are grateful to the Government of Bahrain for its support and businesslike approach.” Mr. Al-Razzuqi added:“The entry of such fine institutions into Al Dur IWPP as shareholders is a further recognition of the merits of the project. We are pleased to have with us again, the Social Insurance Organisation, our partners in Al-Ezzel Power Company. We welcome our new partners: Instrata, Bahrain Islamic Bank and First Energy Bank and recognize the role played by Capital Management House in raising support for the project. ”


A syndicate of 20 international and regional commercial and Islamic banks, in addition to the Export-Import Bank of the United States, is participating in the US$ 1.6 billion loan. US EXIM is expected to contribute US$ 229 million to the financing once its contribution has been approved by the U.S. Congress. The Korean Export Insurance Company provided commercial and political risk cover for part of the financing. 


The banking syndicate is led by Calyon, Mashreqbank and Standard Chartered Bank as Original MLAs. The syndicate includes Al Rajhi Banking & Investment Corporation, Arab Bank, Arab National Bank, Banque Saudi Fransi, Bayerische Landesbank (London Branch), Credit Industriel et Commercial (London Branch), Dexia Credit Local, Export Development Canada,  Fortis Bank, HSBC Bank, KBC Bank (Dublin Branch), KFW IPEX-Bank, National Australia Bank, Société Générale, Bank of Tokyo-Mitsubishi UFJ, The Islamic Bank of Asia and WESTLB (London Branch)

© 2000 - 2020 Al Bawaba (

You may also like