Newsletter No. 171
January 25, 2006

 

TIGHTENING RELATIONS BETWEEN JAPAN AND BAHRAIN

It was announced in September that the Kingdom of Bahrain opened its first embassy in Tokyo with Khalil Ibrahim Hassan -- a former Health Minister -- as the first ambassador. Presumably, the small size of Bahrain had mitigated against the establishment of an embassy in earlier years, since Japan and Bahrain have maintained diplomatic relations since May 1972:

1934 -- First shipment of Bahraini oil to Japan.
1971 -- Japan recognizes the independence of Bahrain.
1972 -- Diplomatic relations are established.
1988 -- Japan opens an embassy in Manama.
2005 -- Bahrain opens an embassy in Tokyo.

For more on recent Japan-Bahrain political relations, see Shingetsu Newsletter No. 143 and the website of the Japanese Embassy in Manama: http://www.bh.emb-japan.go.jp

Now comes news that Sumitomo Corporation will partner with two other companies to build and operate the Al-Hidd Independent Power and Water Project in Bahrain. Sumitomo will hold a 30% share together with its partners, Intenational Power PLC (40%) of the UK and Suez Energy International (30%) of France and Belgium. The contract is for 20 years and costed US$ 1.25 billion. Water will be desalinated and power generated, and then sold back to the Bahraini government.

This is the largest privatization agreement in the history of Bahrain. The water supplied by Al-Hidd is expected to account for 65% of the nation’s total, and the power will account for 20%. It will thus play a huge role in the life of the nation.