Sumitomo Corporation to Participate in Power Generation Project in Abu Dhabi, UAE

Sumitomo Corporation (President and CEO: Susumu Kato; Head Office: Chuo-ku, Tokyo; hereinafter, "Sumitomo"), together with Korea Electric Power Corporation (CEO: Kim Ssang-Soo; Head Office: Seoul, South Korea; hereinafter "KEPCO;" hereinafter Sumitomo and KEPCO are collectively referred to as "the Consortium") have reached an agreement for the purchase of the right to operate and own  Shuweihat S3 project in the United Arab Emirates (UAE) and concluded principal contracts, including a long-term power purchase agreement, with Abu Dhabi Water & Electricity Authority ("ADWEA").

In July 2010, the Consortium participated in the ADWEA's international tender for Shuweihat S3 project right. In October, the Consortium was selected as Fist Ranked Bidder and has since continued negotiations with ADWEA.

The Consortium will construct a gas-fired combined cycle power plant, with a capacity of 1,600 megawatts, adjacent to Shuweihat S1 Plant partly owned by Sumitomo, which is located in Shuweihat, approximately 250 kilometers west of Abu Dhabi, the capital of the UAE. Construction of the new power plant will start in March 2011 and commercial operation are scheduled from March 2014. All generated electricity will be purchased by ADWEA under the 25-year, long-term power purchase agreement.

The total project cost will amount to approximately 1.5 billion dollars, including the cost of plant construction. Roughly 300 million dollars will be covered by capital investment, 60% of which will be contributed by ADWEA, 20.4% by Sumitomo and 19.6% by KEPCO. The remaining 1.2 billion dollars will be covered by project financing, along with syndicates of international commercial banks. Financial close is expected to take place in April 2011.

S3 Plant, with the gas turbines manufactured by Siemens of Germany, will be a highly efficient combined cycle power plant that offers such outstanding features as high efficiency,  with low gas consumption and CO2 emissions. The plant will embody Sumitomo Corporation's initiative for environmentally friendly business operation.

This project is the second IPP/IWPP project for Sumitomo in Abu Dhabi, following the Shuweihat S1 Power Plant (with daily power output of 1,500 megawatts and daily water output of 460,000 tons). Since its participation in the Shuweihat S1 Project, Sumitomo has been involved in its management and has accumulated operation and maintenance expertise. By partnering with KEPCO, which has extensive experience in power plant operations in South Korea and is aggressively advancing into the international market, Sumitomo is demonstrating its commitment to ensuring the success of the project by leveraging the strengths of the two companies. A plant operation and maintenance company will be co-established by the Consortium.

The Gulf nations have experienced a sharp growth in electric power demand, accompanied by industrialization and the diversification of industry. To meet with this active demand, a number of IPP projects are planned to be launched in a near future. Sumitomo has focused on the Gulf nations as one of its core markets and will advance the accumulation of power generation assets.

【Place of the project】


【The Shuweihat S1 Power Plant　(as a reference) 】