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Sun 27 Mar 2011 06:51 PM

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Kuwait issues tender for $2.7bn power plant

Construction of Al-Zour North plant will help Gulf state meet rising demand for electricity

Kuwait issues tender for $2.7bn power plant
Kuwait has issued a tender for construction of the Al-Zour North power plant, one of the country’s biggest projects to boost electricity supplies. (Getty Images)

Kuwait has issued
a tender for construction of the Al-Zour North power plant, one of the
country’s biggest projects to boost electricity supplies, which could
cost an estimated KD750 million ($2.7 billion).

Eleven
companies and consortia, including Mitsui & Co, Marubeni Corp,
General Electric and GDF Suez, prequalified to bid for the combined
generation power plant, which will have a capacity of 1,500 megawatts
and 100 million imperial gallons of water a day, Eyad Ali Al-Falah,
assistant under-secretary for Technical Services at the Ministry of
Electricity and Water, said on Sunday in an interview.

“It is
expected that we choose the preferred bidder by the end of this year,”
Al-Falah said. Kuwait’s government “will not hold more than 24 percent”
of the company responsible for building the plant, while the “strategic
investor won’t hold less than 26 percent,” according to Al-Falah.

The
remaining 50 percent of the shares will be sold in an initial public
offering.

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. Most of its new construction projects fall
under a four-year, 30.8-million dinar development plan.

Al-Zour
North, to be built in the south of the desert Gulf state, is expected to
start operations at the beginning of 2014, Al-Falah said.

It is the
first of five facilities that the authorities want to build in the Zour
North area and which will have a combined capacity of 4,800 megawatts
and 280 million imperial gallons of water, he said. Four of the plants
will produce power and water or just power, while the fifth will be
solely for water.

BNP Paribas
SA is the financial adviser for the project and is part of a consortium
overseeing its implementation.

Al-Falah is coordinating the project
between the ministry and the Partnerships Technical Bureau, which
oversees the government’s Public-Private Partnership program.

Kuwait is
the fifth-biggest producer in the Organisation of Petroleum Exporting
Countries and produced 2.3 million barrels of oil a day in February,
according to Bloomberg data.

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