AES pulls out of Oman and Saudi Arabia power tenders

24 February 2011

Decision fuels rumours of US developer’s intention to leave Middle East

The US’ AES Corporation has decided to terminate its participation in upcoming tenders to build independent power projects (IPPs) in Oman and Saudi Arabia.

Industry sources say the decision to cancel bids for upcoming IPPs in Oman and Saudi Arabia signifies a willingness by AES to pull out of the region altogether due to instability as a result of the wave of popular uprisings.

“We are not participating in the bids in Saudi Arabia and Oman … The decision was taken by our board of directors … I think it is a bit of a knee-jerk reaction,” says a source at AES.

“We will continue to operate our power station at Amman East [Jordan] and we don’t currently have any plans to sell it,” the source adds. “[The company] has not made a decision at this time on whether it will bid on upcoming other tenders in the region.”

Oman Power and Water Company (OPWP) had prequalified AES along with five other developers to build a 1,500MW IPP at Sur.

Bids are to be submitted by 7 March. However, AES will not enter a bid following a decision by the company’s board on 21 February.

The winning bidder will bring 400MW of power capacity online by the summer of 2013 to help the country meet its peak demand during the hot months. Full commissioning is scheduled by the following summer.

Similarly, Saudi Electricity Company (SEC) prequalified AES to bid to build a 1,800-2,100MW IPP at Qurayyah in a consortium with Saudi Masader Company for Water, Power & Gas and China’s Sepco 3 as EPC contractor.

Six other groups were prequalified in December 2010 and bids are due in on 19 March. However, AES has opted to withdraw its participation in this IPP too.

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