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January 4, 2021

Dubai moves on $1.2bn waste-to-energy scheme

By MEED   

Japanese-led team to build and operate the facility for 35 years

Japan-headquartered Itochu and the Swiss subsidiary of Hitachi Zosen have secured a $1.1bn order to build and operate the largest planned waste-to-energy (WTE) plant in Dubai, according to a report by Tokyo-based media.

The scheme will have the capacity to treat 6,000t a day, equivalent to approximately half the city’s waste, and will have a power generation capacity of 200MW.

The contract is for 35 years with the plant scheduled for commercial operation by 2024.

MEED reported that the project stakeholders are expected to reach commercial close by the end of November for the planned build, operate, and transfer (BOT) contract for Dubai Municipality’s WTE power project that will be located in a waste landfill site in Warsan.

According to an industry source, the project development team includes:

  • Itochu (Japan)
  • Hitachi Zosen Inova (Switzerland)
  • Besix (Belgium)
  • Dubai Holding (UAE)
  • Dubai Aluminium (UAE)
  • Tech Group (UAE)

It is understood the special project vehicle will be owned by Itochu (20%), Hitachi Zosen Inova (10%), and Dubai Holding (31%). The other shareholders will maintain the remaining shares.

Changes from the previous scheme

In January 2018, it was reported that the municipality awarded the 30-year BOT contract to a consortium led by Belgium’s Besix and Hitachi Zosen Inova.

However, it is understood that the final project agreements were not signed at the time.

MEED understands that construction works on the project have started ‘on a limited scope’, pending commercial and financial closure.

The Japanese Sumitomo Mitsui Banking Corporation (SMBC) has also replaced the US/India-based Synergy Consulting as financial adviser to the project, which was initially expected to require between $680m and $950m of investment.

The initial waste-to-energy project was expected to have a minimum capacity of 2,000 tonnes a day (t/d) and produce up to 171MW of electricity.

Prioritising waste-to-energy

In January, Dubai Municipality awarded Besix the contract to build and operate a new landfill gas-to-energy facility in Dubai’s Al-Qusais area for 16.5 years. The project will comprise a network of 22km-24km of pipes and treat up to 9,000 cubic metres of landfill gas an hour. The facility will have a production capacity of 12MW.

Both WTE projects are in line with Dubai’s Strategic Plan 2021 and the Dubai Integrated Energy Strategy 2030, both of which include a commitment to protect the environment and improve sustainability in the energy sectors.

Dubai Municipality estimates that the quantity of municipal solid waste generated in the emirate in 2014 was 7,000 t/d.

A joint venture of Sharjah’s Beeah and Abu Dhabi’s Masdar expects to complete the construction works on the UAE’s first WTE plant next year.

Abu Dhabi is also planning two WTE plants in Mussafah and Al-Ain.

This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here

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