Arab financing pledge boosts Merowe dam

04 April 2003
The Merowe hydroelectric dam project has received a major boost following the commitment of four Arab development agencies to provide full financing for the scheme's mechanical and electrical (M&E) package. The four agencies are also considering part-financing the package covering the equipment for the power transmission system. Bidders for the two packages, which are estimated to have a combined value of at least $600 million, were originally required to include their own financing proposals. The bid deadline for both packages has now been extended by two months to the end of May to allow companies to revise their bids (MEED 21:3:03).

It is understood that the pledge of the funds was made after several of the companies shortlisted for the M&E package indicated they would not be bidding due to the complex financing requirements. Among companies expected to bid for the M&E works are Austria's VA Tech Hydro, France's Alstom, Germany's Voith Siemens Hydro Power Generationand Chinese companies. Bids for the package are now due to be submitted by 31 May.

Three out of the four Arab funds that have already agreed to finance the project's civil works package are also understood to have pledged financing for the M&E portion. An unidentified fourth fund will provide additional financing. The agencies that will finance the civil works package are Saudi Development Fund, the Kuwait Fund for Arab Economic Development, the Abu Dhabi Development Fund and the Arab Fund for Social & Economic Development.

Negotiations are also under way between the Arab funds and the client, the Irrigation & Water Resources Ministry, to provide part financing for the project's transmission portion. Companies will be required to bid for the package by late May or early June.

Five international groups were prequalified last year to bid for both packages.

Bid evaluation is still ongoing at the ministry for the civil works package. According to the bid opening prices, China International Water & Electric Corporationwith China National Water Resources & Hydropower Engineering Corporationquoted a price of Eur 549 million ($583 million). A joint venture of Salini Costruttoriof Italy and Athens-based Consolidated Contractors International Company (CCC)came in second, havingquoted Eur 622 million ($661 million) after discount. A contract award is expected by May. Germany's Lahmeyer Internationalis the engineering consultant.

The 520-metre-long hydroelectric dam will be located near the Nile's fourth cataract, some 210 kilometres north of Khartoum. Construction is due to be completed in 2008.

The dam will house 10 125-MW hydroelectric turbines and produce enough power to meet rising demand around Khartoum. Sudan, under the terms of an agreement signed with Egypt in 1959, is entitled to utilise 18,500 million cubic metres a year from the Nile.

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