Operation and Maintenance
Prior to November 3, 2019, our RO plant was separately operated. Since November 3, 2019, our entire plant is operated by the Operator at arms’ length in accordance with the Operation and Maintenance Agreement, the term of which is 25 years from the Commercial Operation Date. The Operator is a wholly-owned subsidiary of ENGIE, one of the International Sponsors, and has been operating our plant for over four years. The commonality of ownership between the Operator and us means that there is a strong alignment of interest which ensures that our plant is operated effectively.
The Operator is responsible for maintaining our plant in accordance with the applicable legal requirements and good utility practice. Under the provisions of the Operation and Maintenance Agreement, the Operator carries out the operation and maintenance of our plant, including (among others) administering the LTMAs, testing the performance of our plant, and preparing long-term operating maintenance planning and annual operating budgets. In consideration of the Operator’s services we pay the Operator a prescribed annual fee (subject to indexation) on a monthly basis plus specified allowable reimbursable operating costs, including wages/costs of the Operator’s staff and seconded staff, amounts paid to suppliers for equipment and consumables and amounts paid under subcontracts. The Operator incurs liabilities for failing to achieve targeted power and water availability, budgeted operating costs and if fuel demand is greater than projected demand.
Health, Safety and Environment
The Environment Agency – Abu Dhabi granted the environmental approval for our plant on October 13, 2014 based on a comprehensive environmental impact assessment report. The Environment Agency – Abu Dhabi approval confirms that our plant meets the applicable environmental requirements in all aspects both for the construction and operation stages.
The Environment Agency – Abu Dhabi renewed the environmental license for our plant on September 6, 2021.
We are subject to various national and local environmental laws and regulations governing the emission, discharge, handling, storage, transportation, disposal, import and export of hazardous waste and materials. We have a strong environmental record and believe that we are currently in material compliance with all applicable regulations. We currently possess all material environmental licenses and permits required for the operation of our businesses. Our plant is managed in accordance with ENGIE’s and TAQA’s environment and health and safety guidelines which are compliant with all UAE requirements, IFC performance standards and the Equator Principles.
ADPower has granted us a lease of the land comprising the leased premises on our plant site, which is owned by ADPower, as specifically described in the Land Lease. The initial term of the Land Lease is 30 years and it will expire on October 31, 2044. The term will be renewed automatically on a year-to-year basis following expiry of the initial term, for the useful life of the plant. The leased premises are leased to us at a nominal basic rent amount of AED 1.00 per annum, payable in advance.
The operation and maintenance of our plant is performed under the responsibility of the Operator in compliance with the Operation and Maintenance Agreement. The Operation and Maintenance Agreement requires us to engage certain staff who then perform operations and maintenance activities under the supervision of the Operator (however these employees remain employed by us at our own cost and are not seconded to the Operator).
The Operator has limited liabilities as agreed in the Operation and Maintenance Agreement.
As at December 31, 2020, the Operator had three employees and we had 110 employees.