Dubai IPP cancellation may impact on other UAE projects

There are fears that the recent cancellation of a planned Independent Power Project (IPP) in Dubai could have repercussions for future power infrastructure schemes.

Dubai hotel

Meed reports that Dubai Electricity & Water Authority’s (Dewa) plans to develop an IPP at Hassyan was intended to be the first of several further IPPs and other public-private partnerships (PPPs).

The government hoped to use PPPs to enable it to continue developing infrastructure without having to pay for it up front, as it did before the economy collapsed in 2009, leaving it with a budget deficit it is trying to balance.

Shelving the Hassyan project is now expected to taint interest from bidders on future Dubai projects. “I don’t think anyone will bid on an IPP for Dewa again,” says one source involved in the Hassyan project. “And who would bid for any PPP in the rest of Dubai now?”

Dewa is understood to have been planning to tender a solar power project at Hassyan later this year. “Unless the solar developers are really hungry for the work, the responses to this will not be as strong as if the first IPP had gone ahead,” says one source in the power sector.

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