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TRANSCRIPT
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IPR in the Middle EaJanuary 2006
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IntroductionMark Williamson
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Our commitment to the region
Creating value thro
Project developmconstruction
Offtake contract dexecution
Project financing
Plant operation -
66%
Merchant(short/medium
term contracted)
Contract Type(by ne
0
500
1,000
1,500
2,000
2,500
2001 2003
Net MW
2002 2004
Net MWunderconstruction
200620052000
Set up inregion
Al Kamil,Oman
Shuweihat,UAE
Umm Al NarUAE
TihamaSaudiArabia35% Al
Kamil IPO
Ras Laffan BQatar
Al HiddBahrian
MW ME Net MW
Middle East . . . in the IPR portfolio
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Contribution to IPR from the region
Only includes equity from
2001 2003
EBIT
2002 2004
Middle East EBIT (m)
1-1
9
22 23
54
29
85
Equity
Middle East . . . in the IPR portfolio
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OverviewRanald Spiers
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IPR in the Middle East
Six projects in six years with an enterprisevalue of US$6.5 billion
~ current IPR equity commitment ofnearly
US$400m
Creation of new region - 29m PBIT by2004
Existing assets performing well Construction is the other major
regional activity
Power and desalination
~ IPR largest private supplier ofdesalinated water in the world
Pi eline of future ro ects
UAE
USaudiArabia
Qatar
Bahrain
Al Hidd
Tihama
Shuweihat
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0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2002 2003 2004 2005 2006A
Ue
S
T
650 MW
285
2008
R
(1)
2007
A
U
MW
870 870 870 650 650 650
1,500 1,5001,500 1,500 1,500
700 1,550 1,550 1,550
1,075 1,075 1,075
1,025900600
910910 910
285 285 285 285 285 285
1,155
2,655
3,355
6,5706,870 6,995
(1)
285
The Middle East - a growing asset portfol
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The Middle East Team
Abu Dhabi Development Office~ project selection, bidding, negotiating, project
development and management
Project companies
~ construction, asset management, client and partnerelationships, operations and maintenance
Operating companies
~ operations and maintenance, owner and partnerrelationships
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Key markets
Primary target markets: UAE
Qatar
Saudi Arabia
Oman
Bahrain
Kuwait
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Macro environment
Stable Governments, low country risk rankings and goratings
Massive oil and gas reserves
Petrodollar economies
Strong economic growth driven by high oil prices anddiversification away from oil
Growth rates between 5% to > 10% pa
Drivers for power and water demand
~ infrastructure development / tourism
~ replacement vs incremental demand
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Regulatory overview
Pragmatic regulation, primary method of control vialong-term contracts
Markets unlikely to liberalise in the short or medium te
Environmental regulation
~ most new plants gas-fired
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Commercial structure
Long-term contracts which set in stone all major revencosts
Major risks laid off wherever possible
PWPAs, PPAs, ECAs, NGSAs
EPC costs fixed with LDs for delays in construction anperformance
Long term operations and maintenance service agreeOEMs
Interest rates and currencies hedged
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Return on investment
Return profile similar across the region UAE local shareholder return 13%
Seek to enhance returns by O&M, success fees and T
Cash generation, use of Equity Bridge Loans
Scope to increase return once project has beencommissioned, for example by refinancing
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Financial structuring
Projects structured using project finance~ carried out in conjunction with London-based proje
team
Maximise use of senior debt
Availability of local capital and international debt with MLAs /JBIC
High leverage is not a problem
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Competitive environment
Projects becoming increasingly competitive but IPRstill winning regularly
New players from Japan, Korea, Malaysia
Traditional competitors (Suez/Tractebel, AES,Marubeni)
Fewer EPC contractors tends to limit competition
Competitors or partners (eg Mitsui)
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Partnerships
Partnering is a key element of risk diversification andgaining local knowledge
ADWEA, CMS, Saudi Oger, QEWC, Mitsui, TEPCO,Sumitomo, Chubu, Suez
We choose the right partners to help us win the deal
Each partner brings something different to the table
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Desalination
Strong power demand and even stronger water dema Most Gulf projects are designed to offer both power a
water
Increases the overall efficiency of the plant
Uses waste heat from the steam IPR has assets with the major thermal desalination
processes
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Agenda
Contract Structures David Wadham
Financing our Growth Peter BarlowDesalination Jaideep Sandu
Coffee Break
Oman Tom Mackay & Kevin Cox
Abu Dhabi David Barlow & Ed Metcalfe
Saudi Arabia David Barlow, Jeff Wright & Stev
Qatar Tom Mackay
Coffee Break
Bahrain John Hurst
Summary Ranald Spiers
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Contract structuresDavid Wadham
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Similarities across contracts
Part-owned in conjunction with other international or lpartners
Financed on a highly leveraged, project finance (limitebasis
Operate with the security of a long-term power (and wcontract for the plants available capacity and output
Contract with sovereign/quasi-sovereign counterparty
~ states single buyer of power and water
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Differences across contracts
PWPAs structured on an energy conversion basis (ECfuel supply agreement (FSA)
Most projects are BOO, some BOOT
Sub-contracted O&M or combined owner/operator str
Government interest in some projects
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PWPAs and PPAs
Project company responsible for:
~ design~ construction
~ commissioning
Offtaker obligation to provide connections to power anand purchase available capacity and output
Flat tariff with capacity charge to recover debt serviceand equity return; pass-through output charge to coveand fuel
Payment is in local currency (except Tihama) but inclu
rate protection
~ ownership~ operation
~ maintenance
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PWPAs and PPAs (cont.)
Capacity or termination payments guaranteed by the government
Revenue protection for offtaker defaults and political f(war, change in law, government action/inaction)
Commercial documents subject to local law but intern
arbitration
Finance and construction documents subject to Englis
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PWPAs and PPAs (cont.)
Energy conversion (Abu Dhabi, Tihama) or separate fsupply arrangements (Oman, Qatar, Bahrain)
BOO (Abu Dhabi, Oman, Bahrain), BOOT (Tihama anQatar), with a transfer to the offtaker
Accounting treatment: always an operating or finance
Terms vary from 15 years (Oman), through 20-23 yea(Tihama, Abu Dhabi and Bahrain) to 25 years (Qatar)without market liberalisation renegotiation clauses
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Operation and maintenance
Abu Dhabi
Requires a separate operator owned by foreign inves
Payment on a fixed price basis
Ability to generate Operator fees and bonuses againsequity stake (e.g. Umm Al Nar, 20% stake in the gene70% stake in the operator)
Others
More flexibility (e.g. Al Kamil, Ras Laffan)
Advantages of a combined owner/operator
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Gas turbine maintenance
Long-term arrangements with the OEM (Al Kamil, UmNar, Tihama with GE and Shuweihat and Ras Laffan Siemens)
For one or two maintenance cycles
The benefits of an LTSA include:
All scheduled maintenance sub-contracted for a fixedwith a degree of unscheduled outage cover provided the price
Based on a term warranty concept, i.e. OEM guarante
replace all program parts as needed
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Shareholding structure
Abu Dhabi IWPPs have 60% holding retained by thegovernment
Al Kamil initially 100% owned by IPR, now 65% owne
following a mandatory IPO on the Muscat Stock Mark Ras Laffan has no direct state involvement, although
holds 55% and is in turn listed on the DSM
Tihama and Bahrain owned entirely by private investo
The advantages of a government shareholding and the n
generate local investment opportunities
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Umm Al Nar Shareholders Agreement
Foreign shareholder has the ability to manage the proand enjoys significant minority protection
~ coupled with government partner with shared goainvestor
Board of 7 directors (4 ADWEA and 3 foreign investo
Foreign investor appoints the Executive Managing Di
~ Ed Metcalfe
Voting on all significant matters at board and sharehorequires approval of both ADWEA and the foreign inv
Government IPO provisions (Taqa was listed on the A
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Conclusion
Long-term off take arrangements with single state buyguaranteed by sovereigns with investment grade ratin
strong economic future
Robust contractual terms offering secure future returnrevenue protection for supplier and offtaker defaults aforce majeure events
Projects are embedded in the region, with governmenparticipating as co-investors or encouraging direct pub
Key cost risks (financing and gas turbine parts and mwell mitigated through long-term hedging and supply
Upside remains through refinancing opportunities, the
reduce costs over time and merchant tail on BOO ro
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Financing our growPeter Barlow
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Project finance
Fundamental part of IPRs financial strategy Objective is to finance on a non-recourse basis at the
level
S
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Structure of Middle East IPPs/IWPPs
Assets backed by long-term (20yrs+) Power (and WaPurchase Agreements (PPAs/PWPAs)
Contractual Structure designed specifically fornon-recourse financing
Clients obligations backed by Government guarantee
Predictable, long-term cashflows allow high leverage sponsors support
L d i IPP/IWPP i k/
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Lenders view on IPP/IWPP risk/country risk
No merchant risk Excellent track record of project financed IPPs/IWPPs
success stories / accepted model in the banking mar
Loan syndication allows diversification of lending acrodifferent projects/countries: lower risk
Project financed IPPs/IWPPs include security on assestricter covenants than corporate loans
ME countries hydrocarbon-rich, financially sound andpolitically stable: country risk acceptable to most inter
PF lenders
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IPR biliti i d bt it l i i
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IPR capabilities in debt capital raising
Core skill - IPR takes lead role in every project financ To date 5 IPPs/IWPPs project financed in the region
Raised $3.9 billion in non-recourse bank debt
IPR successfully financed first large scale IPP in Saud
Arabia Financing also achieved in potentially adverse market
conditions(e.g. Shuweihat syndication launched on 12 Sept.2001; Umm Afinancing arranged at start of 2nd Iraq war)
In 2004 successful IPO of Al Kamil on Omani stock ex
IPR biliti i d bt it l i i
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IPR capabilities in debt capital raisingNon recourse long-term debt
Al Kamil: $100m
Shuweihat: $1.2 billion (of which $100m Islamic T
Umm Al Naar: $1.1 billion (of which $250m IslamiTranche)
Tihama: $510m
Ras Laffan: $663m
Al Hidd $1.0 billion (in negotiation)
L d tit f f t d l
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Lenders appetite for future deals
Competitive pricing and increasing level of interest sularge appetite for future IPP/IWPP deals in the region
Virtually all major international project finance lenderspresent in the region and display appetite for more de
More regional players are becoming familiar with proj
finance through participation in loan syndications
Case st d
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Case study:Umm Al Nar
Largest IWPP in the world:
~ existing net capacity: 870 MW (power) + 162 MIGD (wate
~ after construction net capacity: 1,550 MW (2,200 MW for 2construction) + 95 MIGD
23 year PWPA with ADWEA: proven contractual structure (4thAbu Dhabi, but longest tenor to date);
Largest ever project finance deal at the time, when lenders apregionwas limited;
Financing plan structured to maximise liquidity and included ufinancing,short and long term conventional debt;
Lon -term debt tenor: 20 ears
Case study:
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Case study:Umm Al Nar
Debt FacilitiesAmounts
US$ million Main Features
1) Equity Bridge Facility 441 Tenor / Repayment: Bullet repayment on July 2
Of which: Islamic Tranche 291
Of which: Conventional Tranche 150 Other: 100% guaranteed by Shar
2) Short Term Facility 232 Tenor / Repayment: July 2006 to July 2008
Of which: Islamic Tranche Nil
Of which: Conventional Tranche 232 Other: Ranking Pari-Passu with L
3) Long Term Facility 1,105 Tenor / Repayment:
Of which: Islamic Tranche 250
Of which: Conventional Tranche 855 Other:
Total Debt Facilities 1,778
Door-to-door 20 years; Pro
repayments: Jan 2009 to J
"True-Up Advance": Drawd
of availability period to repa
EBF and achieve 80:20 ge
to cover ratio covenants)
Case study:
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Case study:Umm Al Nar
Capital Structure
Amounts
US$ millio
Total Funding Requirements: 2,116Of which: Acquisition Purchase Price 1,000Of which: EPC Contract 736
Sources of Funds
US$m % US$m %Short Term Facility 231 10.9% 0 0.0%Long Term Facility 978 46.2% 1,102 52.1%Equity Bridge Facility 440 20.8% 0 0.0%Equity Injection 0 0.0% 315 14.9%Cash Flow From Operations 468 22.1% 698 33.0%
Total Sources of Funds: 2,116 2,116 2,116
Before
"Refinance"After
"Refinance"
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DesalinationJaideep Sandhu
Introduction
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Introduction
Removal of salts from seawater
~ suitable for human consumption, agriculture or induse
Desalination Processes
~ Thermal Distillation Processes
- Multi Stage Flash (MSF)- Multi Effect Distillation (MED)
~ Membrane Processes- Reverse Osmosis- Electro Dialysis
~ Hybrid Plant (Thermal with RO)
IPR Middle East Desalination portfolio
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100
181.5
-
30
311.5
52.5
IPR Middle East Desalination portfolio
Shuweihat S1 IWPP
MSF (Fisia)Umm Al NarMSF & MED (Fisia, IHI, Sidem,Doosan, Hitachi Zosen)*
Ras Laffan Facility B
MSF (Doosan)Al Hidd, BahrainMSF & MED (Fisia, Sidem)
Total Desalination capacity
Potential opportunity:
Abu Dhabi Reverse Osmosis Plant
100
95
60
90
345
Assumeconstruction
2006 2008
Typical Power/Water Revenue Split
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Typical Power/Water Revenue Split
Dependant on power and water capacities and load fa
Power/Water capacity ratio of 15:1 (1,500 MW/100 M
~ e.g. Shuweihat, water contributes around 40% of tand profit
Power/Water capacity ratio of 5:1 (1,000 MW/100 MIG
~ e.g. UAN, water contributes around 68% of the revprofit
Multi Stage Flash Technology - 1
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Multi Stage Flash Technology - 1
Steam
Condensing
Brine
Vapour &Brine Droplets
Vapour
DesalinatedWater
Vapour &Brine Droplets
Vapour
Vacuum
Multi Stage Flash Technology - 2
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Multi Stage Flash Technology - 2
Well proven track record
Large capacity units
Low O&M cost
High quality product water
Used in IWPPs where
adequate steam and poweris available
Technology - Doosan,Hitachi Zosen,HHI/Sasakura and Fisia
Multi Effect Distillation Technology - 1
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Multi Effect Distillation Technology 1
1St Effec
Vapour
2nd Effect
Vapour
Condenser
DesalinatedWater
Desalinated
Water
Vacuum
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Reverse Osmosis Process - 1
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Reverse Osmosis Process 1
Reject Brine
Chemicals
PotableWater
Posttreatment system
MembraneRacks
DesalinationWater
PHigh
pressurepump
Reverse Osmosis Process - 2
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Reverse Osmosis Process 2
Preferred option for standalone water plants
Low capacity units
Easy O&M
Lower installation cost
Higher O&M Cost
Standardisation ofmembranes
Integrated Power and Water Plant
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Integrated Power and Water Plant
Combined Power and Water Plant
G
Gas/Oil
Air
G
Gas Turbines
HRSGs
Steam Turbines
MSF/MEDdistillers
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Middle East IWPP Desalination market
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0
500
1000
1500
2000
2500
MIGD
Abu
Dhabi
Oman Qatar Bahrain Saudi
Arabia
20052015
Middle East IWPP Desalination market
Anticipated Inteand Water Plan
Abu Dhabi
Oman
Qatar
Saudi ArabiaBahrain
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OmanTom Mackay & Kevin C
Macro environment
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Ruled by Sultan Qaboos since
1970 GDP in 2004: US $24.4 billion
Currency: Omani Rial pegged toUS$
Codified legal system, existingalongside a Sharia system
Oil dominated economy - provenreserves of 5.5bbl
Recent diversification utilising gas
GDP growth rate
Credit rating
Inflation
Population grow
(3)
(2)
(1
(2
(3
Market structure
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Electricity and Water Sector deregulated in 2003
~ separation of generation, transmission and distribu
Independent Regulator overseas power and water se
Transmission Company (Transco) dispatches plant baeconomic merit order and system requirements
Government owned Power and Water Procurer (PWP
purchaser of power and water - then onsells to Distribcompanies
Government owned Electricity Holding Company (EHshares in 100% government owned companies pendiprivatisation
Power and Water Sector
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Peak demand 2,500 MW in2005 growing at 6% in both
power and water Market shares :
3,326Total
200Gas/OilSalalah
585Gas/OilSohar (in construction)
427Gas/OilBarka 1
285Gas/OilAl Kamil
280Gas/OilAl Manah
334Gas/OilWadi Al Jizzi
688Gas/OilRusayl
527Gas/OilGhubrah
PoweMW
FuelType
Facility(2004 figures)
PWP estimates 2004
ElectricityHoldingCompany
46%
13%
Suez Energy
IPR5%
6%Dhofar
Other smallerinvestments
6%
AES
24%
Al Kamil asset overview
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Location: Sharquiya region
Gross capacity: 285 MW OCGT
Fuel: Gas with oil back-up
Employees: 30 plant and 7 Muscat
office
Configuration: Dual fuel plant using GEframe 9E turbines (3 units)
Operational: Q4 2002
UAE
SaudiArabia
Al Kamil commercial overview
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Publicly listed on Muscat Securities Exchange
IPR own 65%, balance held by local shareholders
15 year PPA and GSA expiring April 2017
~ backed by Oman Governmentguarantees
PPA is US$ and PPI linked with
capacity payments based onavailability
Original investment of $133m,funded 80/20 debt/equity
O&M subcontracted to an IPR
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Future prospects / outlook
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Regional and international finance available for Oman
deals
New project opportunities:
~ 685 MW Rusayl / 550-700 MW, 30 MIGD Barka II due 27th March 2006
~ future privatisation of Ghubrah (527 MW and 42 MWadi Al Jizzi (334 MW)
~ expansion of Al Kamil
~ standalone IWP programme in Oman
Summary
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Economically and politically stable
Committed to privatisation programme
Well structured, low risk business at Al Kamil
Excellent technical and commercial performance
Real potential to enhance returns of existing businessadd additional projects
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Abu DhabiDavid Barlow & Ed Metca
Macro environment
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UAE - federation of 7 Emirates~ political power Abu Dhabi
GDP in 2004: $103bn
Currency: UAE Dirham pegged to US$
Oil: 98 bbls proven reserves~ 8% of proven world reserves
Gas - 212 TCF proven reserves- 5th largest in world
Codified legal system~ existing alongside a Sharia system
GDP growth rate
Credit rating
Inflation
Population grow
(2)
(1)
(1
(2(3
(3)
(3)
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Demand growth
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Abu Dhabi Power Demand 1993 - 2004
0
1000
2000
3000
4000
5000
6000
7000
8000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
Power,MW
Installed Power Capacity Peak Power Demand
Abu Dhabi Power Demand Fo
0
2000
4000
6000
8000
10000
12000
2005 2006 2007 2008 2009 201Yea
Power,MW
Installed Power Capacity
Demand growth
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Abu Dhabi Water Demand Fo
0
100
200
300
400
500
600
700
800
900
2005 2006 2007 2008 2009 2010
Year
Water,MIGD
Installed Water Capacity
Abu Dhabi Water Demand 1993 - 2004
0
100
200
300
400
500
600
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004Year
Water,MIGD
Water Capacity Water Demand
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Umm Al Nar commercial overview
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IPR 20%, ADWEA 60%, TEPCO 14%, Mitsui 6%
23 year PWPA with ADWEC
$2.1 billion investment (80% debt and 20% equity)
Financing - $1,100m 20yr loan, $230m 5yr loan, $440equity bridge facility: balance from existing plant reve
O&M ownership - 70% IPR and 30% TEPCO
Arabian Power Company;$2 1 billion project
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$2.1 billion project
Purchase and operation of current Umm Al Nar, Old EAssets and New Existing Assets
Construction of Umm Al Nar New Plant Extension andintegration with New Existing Assets
Closure of old existing assets in 2008
Old Existing Assets
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Capacity payments - generous availability targets
UAN East Station (commissioned in 1979-84);
~ 4 Gas Turbines, total 250 MW
~ 6 MSF Desalination units, total 41.7 MIGD
UAN West Station (commissioned in 1981-86) consis
~ 10 Steam Turbines, total 790 MW~ 10 MSF Desalination units, total 53.2 MIGD
Decommissioned 2008
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Contractor for UAN Plant Extension
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Mitsui single EPC Contractor
Toshiba power plant (Toshiba main sub-contractor)
Hitachi Zosen Desalination Plant
TM T&D 400kV switchyard
COD expected Q3 2006
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Shuweihat
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Power and water industry
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Ministry of Water and Electricity
Saudi Electricity and Cogeneration Regulatory Author
Saudi Electricity Company
~ existing power generation, transmission and distrib
~ responsible for new build IPPs
Saline Water Conversion Company
~ existing desalination capacity
Water & Electricity Company
~ jointly owned by SEC and SWCC
~ responsible for new build IWPPs
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Saudi Aramco Saudi Oger
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The client, off-taker and fuelsupplier
Owned 100% by SaudiGovernment
Number of employees 52,500
Worlds leading producer and
exporter of oil~ circa 3 billion barrels per
annum
Worlds top exporter of natural gasliquids
Established in 1Oger is an inter
construction coin Saudi Arabia
Background in but business distrategy into po
telecoms well u Turnover $1.8 b
annum
Number of emp26,000
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Tihama Power O&M arrangements
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IPR / Saudi Oger Management
Experienced staff recruited from Middle East and Asia
Extensive staff training
IT infrastructure and systems implemented to IPR sta
20 year technical services agreement with IPR
12 year contractual services agreement with General
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Shedgum - GE 7FA
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Ras Tanura - GE7EA
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Juaymah - GE 7FA
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IWPP structure
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IWPP and IPP programme
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Closed Dec 2005 Launched Dec 2005
SEC
SEC
SEC
SEC
SEC
SEC
SEC
WEC
WECWEC
WEC
Sponsor
195 MIGD900 MWShoaiba
24 MIGD700 MWShuqaiq176 MIGD2,500 MWRas Al Zour
75 MIGD1,100 MWAl Jubail
150 MIGD2,400 MWYanbu II
150 MIGD2,400 MWRabigh II
3,600 MWQurayyah II
23 MIGD600 MWShuqaiq III
1,725 MWSubukh
1,725 MWRiyadh PP10 (extn)
WaterPowerProject
1,725 MWMuzahimiyah
(1)
(2)
(1) (2)
Muzahimiyah
Subukh
Rabigh II
Yanbu II
Quray
Shuqaiq III
Shoaiba
Shuqaiq
Ras A
S
A
Saudi Arabia - other opportunities
Marafiq
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q
~ 2,500 MW + 176 MIGD at Jubail (bids due in April
~ 600 MW Yanbu
Aramco
~ possible expansion of existing Tihama assets
~ other cogeneration opportunities
Maaden
~ IWPP supply for Aluminium smelter, mining extrac
Saline Water Conversion Company
~ new build desalination driven projects
Privatisation of existing SEC and SWCC assets
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QatarTom Mackay
Macro environment
Country ruled by the Al Thani family
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Country ruled by the Al-Thani familyfollowing independence from UK
protectorate in 1971 GDP in 2004: US $28.4 billion
Currency: Qatari Rial pegged to US$
Codified legal system alongside a
Sharia system Oil related economy: 15.2 bbls reserves
Gas dominated economy: proven reserves of910 TCF - 3rd largest proven reserves in theworld
GDP growth rate
Credit ratingInflation
Population grow
(3)
(2)
Installed capacity
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Current market share is as
follows:
4304Total
1025GasRas Laffan B
756GasRas Laffan A
567GasRAF B2
376.5GasRAF B1
609GasRAF B970GasRAFASAT
WaM
PowerMW
FuelTypeFacility
2005 figures from Kahramaa
Under Construction
(1)
(1)
(1)
QEWC at 76% Power
IPR at 9.5 % Power
AES at 9.6% Power
Other smallershareholders 4.9% Power
Power and water sector
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Installed capacity of some 2,712 MW and 128 MIGD
~ additional 1,592 MW and 89 MIGD under construc Qatar Electricity & Water Company (QEWC) historica
developed all power generation and water projects
KAHRAMAA sole purchaser and distributor of all powwater in country
Electricity/water demand has growth historically 6-8%annum
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Ras Laffan B commercial overview
Q Power (the project company) is owned 55% by Qat
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Q Power (the project company) is owned 55% by Qat& Water company, 40% by IPR and 5% by Chubu Ele
Power and water capacity and output sold to KAHRAMowned single buyer of power and water)
~ under 25 year BOOT Power and Water Purchase
Plant scheduled to enter commercial operation in threbetween 2006 - 2008
$900 investment - 80% debt and 20% equity
Long Term LTSA signed with Siemens for Gas TurbinMaintenance
Ras Laffan B construction progress
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All three Siemens Gas Turbines are on site and are b
installed. 220kV switchgear for all gas turbines completed
First Doosan Desalination Unit installed and work isprogressing well on its associated pumps and pipe wo
First HRSG with its associated equipment being erect Progress on connecting to the Seawater intake and o
pipework in advanced stage of completion
Ras Laffan B
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Ras Laffan B
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Ras Laffan B
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Potential future projects
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Mesaieed
~ 2,000 MW, 40 MIGD currently in development~ bids to be in by 15 March 2006
Dukhan 1 & 2
~ 3,000 MW, 60 MIGD
Availability of regional and international finance~ eg Ras Gas LNG train 2 needed US $1.5 billion
received US$3 billion in offers
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Bahrain
John Hurst
Macro environment
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Political
~ stable, liberal, and the mostdemocratic of the Gulf States
Currency pegged to the US$
Legal structure very similar to thatof the UAE
GDP growth rate
Credit ratingInflation
Population grow
(1)
Power and Water industry
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Regulatory framework
~ transmission and distribution is solely Governmen~ MEW is the sole offtaker for power and water back
Government of Bahrain Guarantee
International Power and Suez Energy key players in tmarket
Demand growth 8% power, 10% water
Installed capacity ~2,000 MW (excluding Alba aluminusmelter)
Location: Manama
Al Hidd asset overview
Al Hidd
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Location: Manama
Gross Capacity: 910 MW and
30 MIGD, 60 MIGD underconstruction
Fuel: Natural gas
Employees: 2 IPR, 1 Suez, 1
Sumitomo, 198 Seconded fromMEW
Configuration:Phase I - 2 x 13E2 + 30 MIGDwater Phase II - 3 x 13E2
UAE
UASaudiArabia
Qatar
Bahrain
Al Hidd
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Al Hidd commercial overview
Hidd P C IPR S S i
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Hidd Power Company : IPR 40%, Suez 30%, Sumitom
22-year PWPA with Ministry of Electricity and Water; NGSA with Bahrain Petroleum Company (BAPCO)
$1.25 billion investment - 85% debt, 15% equity
Lenders - JBIC, 6 MLAs led by Royal Bank of Scotlan
Combined Owner/O&M structure
Prospects / outlook
IPR ti h b ti Hidd l t f 2
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IPR consortium has been operating Hidd plant from 22006
Financial close expected in July 2006
~ payment of purchase price in July
Immediate earnings
MEW / MOF are both pragmatic and fair clients 2,000 MW IPP to be released by Government of Bahr
shortly
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Summary
Ranald Spiers
Demand groNew capacityCapacity
Middle East Regional IWPP markets
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5,000 MW4,000 MWKuwait
2,000 MW2,000 MWBahrain
5,000 MW2,700 MWQatar
30,000 MW26,000 MWSaudi Arabia
2,000 MW3,000 MWOman
8,000 MW8,000 MWUAE
Demand gro(pe
New capacityrequired by 2014
Capacity2004Country
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UAE
Shuweihat S2 new build
Bahrain
2 000 MW IPP
Middle East Region - short term prospect
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Shuweihat S2 new build1,500 MW +100 MIGD
Fujairah F2 1000MW + 70 MIGD New Abu Dhabi island development
4,000 MW - 7,000 MW
Oman
Barka 2 new build 700 MW +
30 MIGD Rusayl 685 MW existing
Ghubrah sale of existing 527 MW+ 42 MIGD
Wadi Al Jizzi 334 MW
2,000 MW IPP
Qatar
Mesaieed 2,000
Dukhan 1&2 3,00MIGD
Saudi Arabia
Shuqaiq 700 MW
Marafiq 2,500 M
Ras Al Zour 2,50MIGD
2500MIGD
Desalination - growth potential
Scope for further
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0
500
1000
1500
2000
2500
Abu
Dhabi
Oman Qatar Bahrain Saudi
Arabia
2005
2015Anticipatedand water p
Abu Dhabi
Oman
Qatar
Saudi Arabi
Bahrain
Scope for furtherdesalination
projects in theMiddle East
Operatingdesalination plants- a key skill for IPR
Ability to capitaliseon the MEexperienceelsewhere(Australia, USA)
Strategic focus
Extract maximum value from current projects
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Extract maximum value from current projects
Maintain geographic focus on Gulf States and Saudi A Seek selective opportunities in North Africa (Morocco
etc) markets with similar commercial and risk profile
Target to win one project each year over the next fouryears
Success factors
Best in class operation
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Best-in-class operation
~assets performing in accordance with contracts
World class project finance capabilities
High quality people to implement and run new project
Excellent reputation
~ delivered assets on time and within budget Robust relationships with key clients, partners and
contractors