Suez SA said that it, International Power PLC (IPR) and Japan's Sumitomo Corp, will spend $1.25 billion to acquire gas and water desalination assets as part as a 20-year power and water purchasing deal in Bahrain.

In a statement, Paris-based Suez said the three companies would finance their part of the deal 85 per cent by debt and 15 per cent by equity.
The Bahrain Ministry of Electricity and Water has awarded 40 per cent of the power and water purchasing contract to International Power, 30 per cent to Suez, and 30 per cent to Sumitomo, Suez said.
The deal is part of the Al Hidd independent power and water project in Bahrain, Suez said.
Suez said the power and water purchasing agreement will combine the output from an existing gas turbine plant and a water desalination facility, that will be expanded. Suez said it expects the new plant to be operational by the end of 2007.
Suez said the $1.25 billion cost for its consortium with International Power and Sumitomo includes the purchase of the gas and water desalination plant, the extension of the desalination facility and its integration into existing assets, and financing costs.
Royal Bank of Scotland, Sumitomo Mitsui Financial Group, Mitsui Banking Corporation, Standard Chartered PLC, and Gulf International Bank are arranging the financing, Suez said.