Electricity Ministry receives bids to develop four independent power projects
Iraq’s Electricity Ministry has received bids for contracts to develop four independent power projects (IPPs).
Developers submitted bids of on 22 February for the Samawa IPP in Muthana governorate, which will comprise four 125MW turbines.
The bidders for the Samawa IPP are:
- ContourGlobal (US)
- Uruk (Iraq)
- Al-Barih (Iraq)
- Arabian Gulf (UAE)
Bids were submitted on 21 February for the Diwaniya IPP in Qadisiyah governorate. It will have four 125MW turbines will be built at the site. The bidders for this scheme are:
- ContourGlobal (US)
- Alamco (Qatar)
- Archs (Iraq)
- Al-Dilal (Iraq)
- IFC (Iraq/Jordan)
At least five companies submitted bids for the Shat al-Basrah IPP in Basra governorate on 15 February. The bidders for the scheme that comprises 10 125MW turbines are:
- KAR Engineering & Construction (Turkey)
- ININ Company (Iraq/US)
- Mass Global (Jordan)
For the final Amara IPP in Maysan governorate at least six developers submitted bids on 16 February. The project will comprise four turbines with a total capacity of 500MW. The bidders are:
- Al-Bilal Group (Iraq)
- Al-Fawares (Kuwait)
The new plants will add a total of 2,750MW in electricity generation capacity. The successful bidders will be awarded 25-year build-own-operate (BOO) contracts to develop the gas-fired plants, which will use Frame 9E gas turbines supplied by the US’ GE.
Payments to developers will be based on both the availability of power facilities and the amount of power produced by the projects. Payments will be guaranteed by letters of credit.
The selected developers will be responsible for securing gas feedstock for the projects. This will be reviewed in four years’ time.
Developers will also need to negotiate project-specific power purchase agreements (PPAs) and in the absence of relevant legislation, regulations will be included in the contract model. The government has indicated that contract commitments will take precedence should they be signed before an electricity law, currently being debated in parliament, is passed.
Bids will be evaluated in two stages. The first stage will assess technical capabilities and the second will consider financial aspects. This will include
- 35 per cent - tariff
- 25 per cent - financial strength
- 25 per cent - experience developing, establishing and starting up of the project
- 15 per cent - detailed plan for developing the project, including the implementation of the project from financial close to completion of construction
Iraq has an urgent need for power as most of the country suffers from crippling blackouts for most of the day. The country’s power demand is about double that of its installed generation capacity. Furthermore, demand is growing six times faster than capacity is being installed.
Iraq has an urgent need for power as most of the country suffers from crippling daily blackouts for most of the day
Iraq’s IPP programme has evolved many times since its launch. The original scheme comprised eight projects, including five facilities using GE technology, two projects using units supplied by Germany’s Siemens and one project supplied by a Russian licensee of Siemens. In July 2010, a bidders’ conference for developers was converted to a workshop and the eight IPPs were reduced to five projects. This was then reduced again in September 2010 to just four projects.
The projects that are no longer IPPs are to be tendered as EPCs, except the Russian licensee project, Dibis 1 in Kirkuk province, and another GE project, Nassariya in Dhi-qar, which were both shelved.
The GE turbines for the power plants were procured by the ministry in a $3bn deal, while the Siemens units were secured in a similar transaction worth $2.1bn. Both deals were signed in December 2009.
IPA Energy & Water Economics and DLA Piper, both of the UK, and US-based law firm Chadbourne & Parke are advising the ministry in its IPP programme.
US-based Parsons Brinckerhoff has completed a masterplan for the country’s electricity sector until 2030. The study covers power generation capacity building, transmission and distribution across Iraq.
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