International Power, together with Suez and Sumitomo Corp has announced an agreement to acquire the Al Hidd independent power and water project in Bahrain.

As part of the deal the alliance has signed a 20 year Power and Water Purchase Agreement (PWPA) with the Ministry of Electricity and Water (MEW) for the output from the 910 MW combined cycle gas turbine and 30 MIGD water desalination facility, together with a 60 MIGD desalination expansion. The expansion is expected to be operational by the end of 2007.

The $1.25 billion project, including the cost of the extension, has been awarded on a build, own and operate basis with 40% to International Power, 30% to Suez Energy International, and 30% to Sumitomo. The engineering, procurement and construction contract for the 60 MIGD desalination expansion has been awarded to SIDEM (Societe Internationale de Desalement). The fuel for the plant will be provided by the Bahrain Petroleum Company (BAPCO) under a separate 20-year Natural Gas Supply Agreement.

The acquisition is expected to conclude in early July.