Dewa clears hurdle on third phase of Mohammed bin Rashid Al Maktoum solar park



Dubai Electricity and Water Authority (Dewa) is gearing up for the third phase of its 3,000 megawatt solar park after choosing KPMG as its lead consultant.

Expressions of interest are now being accepted for the 800MW third phase in the Mohammed bin Rashid Al Maktoum solar photovoltaic (PV) park, located about 50 kilometres south of Dubai.

This is enough to power more than 130,000 homes a year, according to statistics from the Solar Energy Industry Association. Saudi Arabian companies such as Acwa Power, the winner of the previous 200MW, and the energy division of Abdul Latif Jameel are expected to bid again.

“I can confirm that our solar PV development company, Fotowatio Renewable Ventures, will be submitting an expression of interest,” said Roberto de Diego Arozamena, the chief executive of Abdul Latif Jameel Energy and Environmental Services.

Acwa Power could not be reached for comment.

Waleed Salman, the executive vice president of business development at Dewa, said in June that the third phase development tender could not be awarded until a consultancy had been chosen.

Eight consultancies were shortlisted in May, including other big names such as EY, Pricewaterhouse Coopers and Deloitte.

KPMG’s bid for the contract totalled about Dh10.5 million with work expected to be completed over the next 10 months.

KPMG will help Dewa shortlist companies that meet requirements such as experience and financial capabilities.

The solar park will total 3,000MW by 2030, with 13MW already being fed into the grid and another 200MW expected to come online in two years.

Saeed Mohammed Al Tayer, the managing director and chief executive of Dewa, said that about 30 per cent of the engineering work for the 200MW phase has been completed.

The utility has commissioned the Swiss firm ABB to build a Dh250m substation that will connect the solar power generated from the park to Dewa’s grid, which supplies power to residents and businesses of the emirate.

“Another substation with the same capacity will be built to transmit the solar energy of the park,” said Dewa.

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Company: Bidzi

● Started: 2024

● Founders: Akshay Dosaj and Asif Rashid

● Based: Dubai, UAE

● Industry: M&A

● Funding size: Bootstrapped

● No of employees: Nine

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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