Malakoff, IP complete Bahrain plant deal
Dubai, May 13, 2012
International Power has announced the completion of the sale of a 40 per cent stake in Bahrain's Hidd Power Company (HPC) to Malakoff International, a wholly owned subsidiary of Malakoff Corporation Berhad.
This partial sale of Hidd Power stake allows International Power (owned 70 per cent by GDF Suez) to comply with Bahrain’s regulatory requirements, a statement said. The value of the sale was not revealed.
The agreements related to the deal were signed on April 30 at the premises of Bahrain's Ministry of Finance between the Government of Bahrain and all the parties.
HPC is a ‘build, own and operate’ power generation and water desalination plant with a total contracted capacity of 929 MW power and 90 MIGD of desalinated water located on the north east coast of Bahrain.
In 2006, HPC was sold by the Government of Bahrain, via public tender, to a consortium of International Power, GDF Suez Energy International and Sumitomo Corporation.
HPC is amongst the largest independent water and power projects in Bahrain, providing approximately 39 per cent and 62 per cent of the kingdom’s current power and water supply respectively. The entire power and water output of HPC is contracted until 2027 under a power and water purchase agreement with the Electricity and Water Authority of Bahrain.
As a result of the combination of International Power and GDF Suez Energy International in February 2011, the combined holdings of the two entities exceeded the Bahraini market concentration limits, i.e. 30 per cent of Bahrain’s installed generation capacity. This partial sale of Hidd Power Company allows the combined International Power-GDF Suez entity to comply with the kingdom’s regulatory requirements, the statement said.
Following this sale, HPC will be 40 per cent owned by Malakoff, 30 per cent by International Power and 30 per cent by Sumitomo.
Shankar Krishnamoorthy, president and CEO of International Power-GDF Suez Middle East, Turkey & Africa, said: “Bahrain’s power and water sector is governed by well-structured regulations. By reducing our ownership in Hidd Power Company, we have now met the market concentration requirements. We thank our existing partner Sumitomo for their support throughout the process and welcome our new partner, Malakoff, in Hidd Power Company. Together we remain fully committed to providing Bahrain’s citizens with the supply of power and water they need.”
For Malakoff, the acquisition is in line with its strategy to further expand its operations globally. Malakoff has already won and implemented projects in Saudi Arabia and Algeria, and before that also in Oman and Jordan, and the current move to expand it presence into Bahrain will further solidify its position as a leading independent power and water producer, the statement said.
Zainal Abidin Jalil, the CEO of Malakoff, said: “Malakoff is very proud to have won this bid. This is indeed a corporate milestone for Malakoff. It represents not just another phase of growth for the company but is a testimony of Malakoff’s strong position in the international power and water producing sectors.
'We look forward to working with the other substantial shareholders namely International Power and Sumitomo Corporation. Together with these international and reputable players in power generation, we are confident that we will be able to create more value for the partnership in the longer term.” - TradeArabia News Service