In a significant transaction demonstrating their commitment to promoting their overseas power generation business, Milbank, Tweed, Hadley & McCloy LLP has advised Tokyo Electric Power Company Incorporated (TEPCO) on its purchase of the entire equity stake in the Umm al Nar power and water project in the UAE previously held by Mitsui & Co., Ltd. (Mitsui).
Milbank partner Alec Borisoff and senior associate Daniel Lin led the team representing TEPCO, with assistance from associate Mindy Allen.
The Umm al Nar power and water plant, commissioned in 2007, is located on Sas Al Nakhl Island, roughly 15km east of Abu Dhabi. The combined cycle gas turbine power plant has a power generation capacity of 2,200 MW and a capacity of 650,000 t/day of desalinated water. Milbank previously worked on the original financing of the project, which was developed at a cost of $2.1 billion on a 20-year build-own-operate basis with Abu Dhabi Water and Electricity Company (ADWEC) as the offtaker.
TEPCO and Mitsui first invested in the Umm al Nar project in 2003 through the establishment of ITM Investment Company Limited (ITMI), in which TEPCO’s wholly owned subsidiary Tokyo Electric Power Company International B.V. and Mitsui participated alongside International Power plc (now ENGIE, and previously known as GDF SUEZ Energy International). With TEPCO’s purchase of the entirety of Mitsui’s 15% stake in ITMI pursuant to this transaction, TEPCO and ENGIE are now joint 50% shareholders in ITMI, which holds a 40% stake in Arabian Power Company, the owner of the Umm al Nar project. The remaining 60% of the project is owned by Abu Dhabi Water and Electricity Authority (ADWEA) and other state-owned entities.
“We’re proud to have worked with TEPCO on this acquisition of these additional interests in the Umm al Nar project,” Mr. Borisoff said. “The investment represents an important step for TEPCO and demonstrates their continuing commitment to investing in strategic overseas assets.”
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