Sumitomo Corporation to Participate in the Az-Zour North IWPP Project

Sumitomo Corporation (Head Office: Chuo-ku, Tokyo; President and CEO: Kuniharu Nakamura), in collaboration with GDF SUEZ (Head Office : Paris) and Abdullah Hamad Al Sagar & Bros. Corp. (Head office : Kuwait. Hereinafter, the three companies are collectively referred to as “the Consortium”) has signed the loan agreements and principal contracts, including a long-term energy conversion and water purchase agreement with the Ministry of Electricity and Water of Kuwait, for the Az-Zour North Independent Water and Power Producer (IWPP) project, which is the first Private Public Partnership (PPP) project in Kuwait

The Consortium has reached an agreement after negotiations since it was selected as a preferred bidder in February, 2012.  The total project cost, including the construction cost, is expected to be around US$ 1,800 million. 20 percent, or US$ 360 million, will be covered by capital investment, 60 percent of which will be contributed by the Kuwaiti government, and 17.5 percent each by Sumitomo Corporation and GDF SUEZ, who will both be actively involved in the project management. Additionally, Sumitomo Corporation and GDF Suez have established an operation and maintenance (O&M) company which will be committed to the O&M of the project. The remaining US$ 1,430million of the project cost will be co-financed by the Japan Bank for International Cooperation (JBIC) and international commercial banks through the project financing scheme. A part of the financing which will be done by Japanese commercial banks will be covered by the insurance for loan of business funds by the Nippon Export and Investment Insurance (NEXI).

The construction for the project will commence by the end of 2013, and the plant is expected to be completed and begin operation by the 4th quarter of 2016.

Sumitomo Corporation’s presence in power and water generation projects in the Middle East consist of the existing Hidd project in Bahrain and the Shuweihat S1 and S3 projects in Abu Dhabi, and this year marked the addition of the Al Ghubrah independent water project in Oman. Such a diverse project portfolio is in line with the strategy of the Japanese government to strengthen relations with resource-endowed countries. Sumitomo Corporation aims to further contribute to the infrastructure and economic development of Middle Eastern countries.

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