Utico investments in UAE cross Dh800M

dubai — UAE-based Utico, the Middle East’s largest private utility, today said it has signed a unique 10-year agreement with the Federal Water and Electricity Authority (Fewa) to serve the Northern Emirates, under a world-first purchase contract model that allows the federal utility to pay only when it consumes water compared to the model followed world over where payment is not linked to usage.

In a statement, Utico said the agreement which has a minimum consumption commitment of six million gallons per day (MIGD) is already operational and the daily consumption by the Fewa has already increased eight to 10 MIGD with rising water demand.

Another additional nine MIGD contract has also been requested

the agreement sets a new benchmark in the world for such contracts Richard Menezes, Managing director of Utico

by the Fewa, the company said. “The agreement sets a new benchmark in the world for such contracts. Usually utility agreements are ‘take or pay’ contracts wherein the buyer ends up paying the supplier even if there is no consumption. Other unique features of the UticoFewa agreement includes fixed pricing during the tenure and no power tariff increase pass through during this period,” said Richard Menezes, managing director of Utico.

The tariff agreed by Utico and the Fewa also takes into account Utico laying transmission lines to connect Fewa network at six different locations 50km from the generation facility in Ras Al Khaimah, Menezes said.

He said that in line with the rising demand, Utico’s investment in transmission and distribution facilities have crossed Dh800 million.

“We are also planning to invest in a 70km pipeline to unserved areas, particularly to support farms,” Menezes said.