Consortium of GCC financial institutions completes sale of strategic stake in leading Bahrain power plant

ADPWC is a gas-fired power generation and seawater reverse osmosis desalination facility in the Kingdom of Bahrain

Consortium of GCC financial institutions completes sale of strategic stake in leading Bahrain power plant

A consortium of GCC financial institutions which includes First Energy Bank, Ibdar Capital, Bahrain Islamic Bank, and Bunyah GCC Infrastructure Fund (managed by Arqaam Capital (regulated by the Dubai Financial Services Authority)) have successfully divested their approx. 20% shareholding in Al Dur Power and Water Company (ADPWC) to Kyuden International Corporation (KIC), which is the international business arm of Kyushu Electric Power Company (Kyushu Electric), one of Japan’s leading power utilities. Kyushu Electric owns and operates generation, transmission and distribution facilities in over 10 countries including Japan.

ADPWC is a gas-fired power generation and seawater reverse osmosis desalination facility in the Kingdom of Bahrain. It has a net power capacity of 1,234 MW and 48 MIGD of water production capacity. Developed on a build, own and operate (BOO) basis, ADPWC is recognized as a key element of Bahrain’s power and water sector, providing energy and water since initiating commercial operations in 2012.

The sale to the Japanese energy group is one of the most significant cross border transactions in Bahrain.

The management of ADPWC highlighted their high appreciation for the strong and professional guidance provided by the directors from First Energy Bank, Ibdar Capital, Bahrain Islamic Bank, and Bunyah GCC Infrastructure Fund (managed by Arqaam Capital) since inception of the project and welcomes the esteemed Japanese partner (KIC) into the company.

Mohammed Khalid Al Khan, Vice President at First Energy Bank, commented, “We at First Energy Bank are delighted to announce the successful divestment of our shareholding in Al Dur Power and Water Company. I am very pleased to welcome one of the largest Japanese energy groups to the Kingdom of Bahrain. This is a landmark transaction for us at FEB, as we have proudly contributed to the growth of Al Dur to become the leading power plant in the Kingdom of Bahrain. As an outgoing director of Al Dur, I am very confident that KIC will be the ideal partners for the company going forward. This is one of the most important cross border transactions in Bahrain and we at FEB are happy to have played a key role in it.”

Fahim Shelot, Head of Alternative Investments at Ibdar Capital, commented “This exit is the culmination of Ibdar’s investment strategy where we were a partner in one the best managed power plants in the GCC and a strategically important asset for Bahrain. The acquisition by one of the most respected Japanese utility groups is a testament to the attractiveness of Bahrain as an investment destination and we are pleased to have contributed our part.”

Jawad Humaidan, Head of Corporate & Institutional Banking at Bahrain Islamic Bank commented, “This is great news to Bahrain as introducing new foreign and strategic investors to the energy sector is considered a milestone and will attract more investors to different sectors. We are very happy to conclude the sale of this investment to a reputable Japanese energy company that will definitely contribute significantly to the value of the Al Dur Power and Water Plant.”

Nabeel Kazerooni at Arqaam Capital Limited, the Investment Manager of the Bunyah GCC Infrastructure Fund, expressed his pleasure to have closed this complex and large cross-border M&A transaction, especially at the current challenging times. “I would like to express my gratitude to all of the people involved in the transaction as well as to the Government of Bahrain.  As an investment manager, we are confident that KIC will bring additional value to the Al Dur Facility and to the overall utility sector in Bahrain. This milestone also marks a significant distribution event for Bunyah’s investors.”   

BDA Partners acted as exclusive sell-side financial advisor under Mark Webster (Partner, Head of Services) and Ahmed Al Balooshi (Senior Advisor - Middle East) who commented, ‘We are pleased to have helped introduce KIC, advised the exiting parties throughout this process, and delivered a successful outcome for all the parties. This deal confirms the attractiveness of Bahrain and the Gulf region as an investment destination for global capital. BDA is especially happy to help connect Japan and the Middle East more closely. We look forward to BDA facilitating more transactions like this in the future.’

Clifford Chance acted as legal counsel to the sellers. Jason Mendens, Partner Clifford Chance said “We are very pleased to have worked with our clients and BDA Partners on this high profile, regional infrastructure services project. To secure this successful outcome for our clients, despite the challenges of the pandemic, is a testament to Clifford Chance's expertise in the region.  We continue to see keen global interest in the region's strategic infrastructure assets. We are advising a number of investors as well as sellers of such assets and look forward to working on more transactions like this.”    

Terms of the transaction were not disclosed.


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