US firm General Electric (GE) is the low bidder on an estimated $2bn contract as part of Algeria’s programme to add more than 8,000MW of power generation capacity between 2015-17.

Bids were opened in early March for a two-part contract calling for the provision of turbines for six new power plants and the construction of a turbine manufacturing facility in Algeria.

Bids were judged on the average price per kilowatt hour of generation. GE submitted a bid comprising $1.9bn in foreign currency and AD3.6bn ($45m) in local currency, equivalent to a tariff of AD2.27 ($0.2) a kilowatt hour.

The company saw off competition from the other bidder, Germany’s Siemens, which submitted a bid of €1.9bn ($2.5bn), equivalent to a tariff of AD2.41 a kilowatt hour.

The contract comprises two lots. The first covers the provision of gas turbines, steam turbines, command and control systems and spare parts for the new power plants.

Combined-cycle plants*
Location Capacity (MW)
Mostaganem 1,400-1,600
Kais 1,300-1,600
Djelfa 1,300-1,600
Oumache 1,300-1,600
Naama 1,300-1,600
Jijel 1,300-1,600
*=Planned. Source: MEED

The second lot involves a commitment to form a joint venture to build a local manufacturing facility for the construction of gas and steam turbines, alternators and command and control systems.

The second lot is divided into two phases. In the first phase, GE and its partner will build a manufacturing complex comprising four factories, known as a power-island. In the second phase, the facilities will be put at the disposal of construction companies, who will provide auxiliary equipment and build the new plants.

The contract is a key part of the government’s programme to add 8,400MW of new power generation capacity between 2015-17, taking total generation capacity to about 19,000MW.

The programme is designed to meet rapidly rising local power consumption. The country suffered widespread blackouts in July 2012, when demand reached a record peak of 9,463MW. Peak demand is expected to reach up to 15,000MW by 2017.