Al-Zour power and water scheme attracts strong interest

04 September 2009

At least 10 groups line up for consultancy work on country’s first independent water and power project.

At least 10 groups of advisers have expressed interest in the consultancy contract for Kuwait’s first independent water and power project (IWPP).

The planned IWPP, which will be located at Al-Zour, will consist of a power plant with a capacity of 1,500MW and a desalination plant capable of producing 100 million gallons a day of desalinated water.

The Electricity & Water Ministry will buy the plant’s output (MEED 14:8:09).

Each team has a separate technical, financial and legal adviser. The groups include the UK’s Mott MacDonald with Ernst & Young, also of the UK, and the US’ DLA Piper; the US’ Shaw Group and Citigroup with the UK’s Clifford Chance; Germany’s ILF Consulting with the UK’s KPMG and Allen & Overy; and Germany’s Lahmeyer International with France’s BNP Paribas and the US’ Chadbourne & Parke.

A team of Germany’s Fichtner with UK companies HSBC and Norton Rose has also expressed interest in the scheme.

Finland’s Poyry has joined a financial advisory team of Bank Muscat and the UK’s Project Financing Solutions. The UK’s Ashurst is the group’s legal adviser.

UK law firm Denton Wilde Sapte is supporting two consortiums. The first comprises Dubai-based Drake & Scull International and the US’ Deloitte & Touche.

The second involves Dutch companies Kema and Royal Haskoning as technical advisers, and the UK’s PricewaterhouseCoopers as financial adviser.

Australia’s WorleyParsons has expressed interest as part of a consortium with Bahrain’s Arab Banking Corporation and the US’ Shearman & Sterling. A team of Black & Veatch and Taylor-DeJongh, both US, with the UK’s Trowers & Hamlins complete the list of known bidders.

The consultants submitted their expressions of interest on 20 August. The Partnerships Technical Bureau, which is overseeing the project, has yet to say when it will shortlist the groups.

The successful bidder will act as the transaction adviser on the project. This includes carrying out economic, financial and environmental feasibility studies for the scheme.

The team of consultants will also oversee the tendering process for the developer.

The developer will then design, build, finance, operate and maintain the IWPP through a special-purpose vehicle. The winning developer will own 40 per cent of the project company.

Kuwait’s government will take a 20 per cent stake in the scheme and sell the remaining 40 per cent through an initial public offering on the Kuwait Stock Exchange.

The power plant will use either steam turbines or a combination of steam and gas turbines, and the desalination plant will employ either thermal or reverse-osmosis technology, or a combination of the two.

The Al-Zour IWPP is one of six private utility projects currently out to market in the GCC.

Saudi Electricity Company issued a request for proposals for its PP11 independent power project (IPP) in June.

Oman Power & Water Procurement Company is also pushing ahead with plans to develop its Sohar 2 and Barka 3 IPPs, with bids due on 19 October. The state-owned utility is expected to select advisers for a coal-fired IWPP at Duqm in southeast Oman shortly.

A consultancy team led by UK-based Ernst & Young is working on a separate IWPP to be located at Ghubrah in northern Oman.

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