France's TotalFinaElf and Tractebel have won a deal to set up a $169.9 million joint venture to work on a major power project in Abu Dhabi, UAE, officials said.

An Economy and Commerce Ministry statement said Gulf Total Tractebel Power's capital was distributed over 62.4 million shares with a nominal value of Dh10 ($2.7) each.

TotalFinaElf and Tractebel, the energy arm of France's Suez Lyonnaise des Eaux, each own 20 per cent of the firm which will be responsible for the Taweelah A1 power station and desalination plan, Abu Dhabi's second independent water and power project.

The Gulf Power, a wholly-owned subsidiary of Abu Dhabi Water and Electricity Authority (Adwea), owns the remaining 60 per cent.

Taweelah A1 is the first asset sale to an international company in the country.

TotalFinaElf and Tractebel in July last year signed a $1.5 billion contract with Adwea to upgrade and expand the Taweelah A1 facility, to provide about a quarter of power and water needs of Abu Dhabi.

Meanwhile, Babcock Borsig Power, a unit of the German engineering group Babcock Borsig, said it has secured a contract worth DM800 million ($388 million) to modernise and extend the Al Taweelah A1 combined-cycle power plant.

The contract was awarded by Adwea, TotalFinaElf and Tractabel.

"It is not only the order volume that makes this project of such huge importance for us," said Babcock Boris Power chairman Hans Fechner. "We know that the combined-cycle power market will grow by around 85 per cent over the next five years.''

Work at Al Taweelah is to begin this month, with completion scheduled for the end of April 2003, the statement said.