Manara-Wartsila $200 Million Joint Venture Eyes Power Projects in Islamic Nations

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Researched by Industrial Info Resources (Sugar Land, Texas)--Wartsila Power Plants (OMX:WRTBV) (Helsinki, Finland), a power solutions provider, and Bahrain-based Manara Consortium have set up a joint venture to foray into the power segment in certain Islamic nations. The joint venture, Manara Wartsila Power (MWP) (Bahrain), will undertake the development of decentralized independent power projects (IPPs) ranging in capacity from 50 megawatts (MW) to 200 MW in the United Arab Emirates, Saudi Arabia and Pakistan. The power will be sold to municipalities, industrial zones and power utilities. MWP will leverage local partnerships to strengthen its knowledge and development capabilities. It will invest an initial equity of $100 million in several IPPs that are already under way in the identified nations.

The joint venture will draw upon the reciprocating engine technology expertise of Wartsila and the investment expertise of Manara. Wartsila, a manufacturer of power plants and marine diesel engines, executes nearly 100 decentralized power projects a year and has power projects of 40 gigawatts commissioned or under development in over 165 countries. Manara Infrastructure Fund LP (MIF) (Bahrain) will oversee investments in projects. MIF, an infrastructure private equity fund sponsored by the four Saudi investment groups of Manara and the 3i Group (LSE:III) (London), will target various sectors including oil and gas, power, transportation and telecommunications.

The two companies have already committed $100 million in equity toward the joint venture, which is expected to have an initial equity of $200 million. Manara's investment of $80 million in the project will be subsequently transferred to MIF. Wartsila has committed $20 million through Wartsila Development & Financial Services, its development and financing division.

In April, Wartsila set up offices and a workshop in Dubai to cater to the burgeoning power segment in the Middle East. In the same month, it acquired International Combustion Engineering AS (ICE) (Svenstrup, Denmark) as part of its strategy to enter into the boiler services segment. In June, it further acquired the boiler services division of ICE's subsidiary in Dubai to focus on the Middle East market.

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