France-led group wins Kuwait power project deal

Paris-based GDF Suez said on Tuesday that it has won a contract as part of a consortium to build a major new power plant project in Kuwait.

It said in a statement that the consortium with Sumitomo Corporation (Japan) and Kuwaiti partner Abdullah Hamad Al Sagar & Brothers has been picked for the Al Zour North Independent Water & Power Project by the Gulf state's Partnerships Technical Bureau (PTB).

The GDF Suez-led consortium will construct and operate a gas-fired combined cycle power plant of at least 1,500MW and an associated water desalination plant.

The project will be jointly owned by the consortium, by Kuwaiti public entities and by Kuwaiti nationals via an initial public offering, the statement said.

Shankar Krishnamoorthy, CEO and president of GDF Suez Energy Middle East, Turkey & Africa, said: "GDF Suez is proud to be the first international investor in private power and water development in Kuwait and to partner with the PTB to develop quality infrastructure for the people of Kuwait."

The capacity of the plant will account for about 12 percent of Kuwait's installed generation capacity and about 23 percent of its installed desalination capacity.

All of the plant's output will be purchased by the Kuwait Ministry of Electricity and Water under a 40-year long-term Energy Conversion and Water Purchase Agreement (ECWPA).

The plant is expected to start commercial operation in 2015.

In March 2011, Kuwait issued the tender for construction of the Al-Zour North power plant, which could cost an estimated KD750m ($2.7bn).

Kuwaiti power demand is increasing at an annual rate of 8 percent. The country needs to raise its power-generation capacity to meet the expansion of residential and other developments and to boost manufacturing and industries such as tourism.