July 9, 2019 / 12:54 PM / a month ago

UPDATE 1-UAE agrees deal for construction of $900 mln desalination plant

(Adds detail, background)

ABU DHABI, July 9 (Reuters) - The United Arab Emirates (UAE) has struck a deal with a consortium of companies over the construction of a $900 million desalination plant in the northern emirate of Umm Al Quwain to meet the growing demand for water in the region.

The UAE’s Federal Electricity & Water Authority (FEWA) agreed the deal with Saudi Arabia’s ACWA Power and MDC Power Holding Company LLC, a subsidiary of Abu Dhabi’s Mubadala Investment Company, a joint statement said on Tuesday.

FEWA will hold a 20% stake while ACWA Power and Mubadala will each own 40%, the statement said, adding the government of Umm Al Quwain will join as a partner and own a stake at a later date in the 150 million gallons per day plant.

Construction will start in the second half of 2019, with initial water production scheduled in 2021.

The project is FEWA’s first asset in partnership with the private sector and will reinforce the UAE’s water security strategy, Suhail al Mazrouei, UAE minister of Energy & Industry and chairman of FEWA said.

Once commissioned, the plant will be the largest desalination project in the northern Emirates, the statement said. (Reporting by Stanley Carvalho; Editing by Saeed Azhar and Mark Potter)

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