The UAE's most efficient power plant will be built in Jebel Ali to cut costs and emissions for industrial heavyweight Emirates Global Aluminium (EGA).
Mubadala and Dubal Holding created a joint venture company to develop the power block and water desalination plant for EGA under a 25-year deal worth up to $272m (AED1bn). The project will fuel EGA's smelter in Jebel Ali, Dubai, generating 600MW of electricity.
Five legacy turbines at the Jebel Ali site will be put on standby upon completion of the project. Siemens has agreed to install the UAE's first combined cycle H-class gas turbine at the plant.
Plans to build what Siemens called the “most efficient power plant in the UAE” were finalised at a signing ceremony attended by senior government and business leaders.
Chief executive officer of EGA, Abdulla Kalban, who attended the ceremony, said the agreement would boost energy efficiency, cut emissions linked to aluminium smelting, and reduce the company's operating costs.
“Bringing in our shareholders to invest in such power facilities through a new company makes sense for EGA from a capital allocation perspective, as we expand our core business upstream and internationally,” he added.
Dubal Holding's chief executive officer, Abdulnasser Bin Kalban, said the business wanted to explore power generation, which made the EGA project an attractive “investment opportunity”.
“This project is expected to improve the overall power efficiency at Jebel Ali smelter and I look forward to further improvements in the near future,” he added.
Mubadala boss, Khaled Al Qubaisi, said the project was a good opportunity to diversify its portfolio of investments and support EGA for years to come.
“For EGA, structuring this project on the Independent Power Producer model provides certainty on power prices for decades ahead whilst preserving capital for other opportunities,” he said.
Karim Amin, Siemens Power Generation's chief executive officer of sales, described the project as a three-way breakthrough: it is the first Siemens H-class system to power an aluminium smelter anywhere in the world; is the most efficient power plant in the UAE; and the most efficient in EGA's fleet.
“This proven technology will be a boost to the UAE’s industrial sector, and we look forward to working hand-in-hand with the EGA, Mubadala, and Dubai Holding team to bring this project to fruition.”