Abu Dhabi said on Wednesday it planned to build a new power and water desalination plant at a cost of about $2 billion to meet surging demand in the Gulf Arab emirate.

The Shuweihat 3 plant will have power capacity of about 1,500 MW and 100 million gallons of water,' Abu Dhabi Electricity and Water Authority's director of privatisation Abdalla Saif Al Nuaimi said at a news conference.

'The estimated cost of the project will be about $2 billion,' he added.

International contractors will be invited to bid with the plant due to be operational by 2012, he said.

Abu Dhabi expects demand for power to rise almost 80 per cent by 2012 on a boom in its construction and industry sector, according to a government forecast issued on Wednesday.

Demand for power in the world's largest oil-exporting region is surging on population growth and commercial and industrial expansion fuelled by record oil prices.-Reuters