Major transactions began in the late 1990s, and accumulated as the UAE s economy gathered momentum in the following decade.
In July 1999, Paribas formed a consortium, successfully submitting a bid to work with the Abu Dhabi Water & Electricity Authority (ADWEA) on the Taweelah A1 power generation and sea water desalination project. The Bank became lead arranger and underwriter for the Abu Dhabi utility company. A letter signed by the Chairman of the newly-merged BNP Paribas, Michel Pébereau, confirmed the underwriting of a surety bond to be issued in favour of ADWEA. A special entity was set up to manage the project, in which ADWEA held 60 percent ownership.
The project came about at a time of technological advance in this area, and the very first projects combining electric power production with seawater desalination whose technology was operated by a consortium comprising French, Japanese and South-Korean companies were just coming through. This concept of an integrated hybrid model enabled the use of electric power to desalinate seawater in winter, when demand for electricity is lower in the Arabian Gulf region than in the summer months.
Christophe Mariot, Regional Head of Structured Finance, emphasises the project s importance. [It] was a real milestone for BNP Paribas the moment when a European bank first started making inroads on the territory of the US banks, which up to that time were invariably awarded the advisory mandates or the role of arranger for major project finance.
A milestone for BNP Paribas
The Taweelah A1 project was without doubt a defining milestone in the development of the project financing business in the Gulf.
Beginning in 1999, Paribas linked up with two industrial conglomerates, which were keen to take on a major electricity project in the Gulf for the first time.
An opportunity to do so was through the Taweelah A1 project. It was in fact a massive venture, comprising the supply of a 1,350 MW electricity generating plant, the purchase of an existing 255 MW plant, and the construction of a seawater desalination plant of over 80 MIGD capacity.
BNP PARIBAS ACTED AS LEAD ARRANGER AND UNDERWRITER
FOR ABU DHABI WATER & ELECTRICITY AUTHORITY (ADWEA)
ON THE TAWEELAH A1 POWER GENERATION AND SEA WATER
DESALINATION PLANT IN ABU DHABI
188 T H E H I S T O R Y O F B N P PA R I B A S I N T H E G U L F S TAT E S