Gecol to convert Tripoli West to IPP

25 July 2008
Abu Dhabi government set to fund $1.3bn scheme to build 1,400MW plant.

General Electricity Company of Libya (Gecol) is set to convert the Tripoli West power plant project to an independent power project (IPP), contractors on the scheme tell MEED.

If it goes ahead, it will be the first time Libya has launched an IPP project. It has also emerged that the Abu Dhabi government is likely to fund the $1.3bn scheme, marking the first time a foreign investor has financed a power project in the country.

Under the IPP plans, the 1,400MW combined-cycle plant would be built on an engineering, procurement and construction basis before being transferred to a private owner.

Gecol is thought to be in talks with Abu Dhabi-based Oasis International Power to own and operate the plant. Oasis declined to comment.

Gecol has assured the contractors originally awarded the construction contracts for the plant that the scheme will not be retendered as an IPP and will only be transferred to private ownership once construction is completed.

However, contractors remain uncertain about their role in the project and warn they could pull out. “It will be cancelled if it is developed as an IPP,” says one source close to the project. “In order to develop it as an IPP, they need experience and they need banking facilities.

“We have already conveyed our concern to Gecol,” says another source close to the project.

“If there is a real IPP scheme, it will take a long time. In that case, we will have no choice but to pull out of this project. They are saying it is not a real IPP scheme at the moment.”

Together with the planned Al-Khaleej plant, Tripoli West was the first power project in Libya to be tendered as multiple contracts rather than as a turnkey contract.

South Korea’s Daewoo Engineering & Construction was awarded the civil works package.

Another South Korean company, Hyundai Engineering & Construction, won the steam turbine and electromechanical works packages.

Doosan Heavy Industries & Construction, also of South Korea, took the boiler contract and Greece’s Archirodon won the offshore works package.

The move by the Abu Dhabi government to fund the project follows a visit by Abu Dhabi’s Crown Prince Sheikh Mohammed bin Zayed al-Nahyan to the country in July.

Gecol, which has a monopoly over power schemes in the country, has traditionally sought funding for its projects only after it has selected contractors for the work.

In the past, this has led to projects being significantly delayed. Now, partly thanks to escalating material costs, the government has been forced to look overseas for funding.

A second project, the planned Sebha power plant, could also be financed by Abu Dhabi.

The contract to build the $650m, 750MW plant was awarded to Global Electricity Services Company, a joint venture of Gecol and South Africa’s Eskom, and Turkey’s Enka Teknik.

There has long been speculation about plans to tender IPPs in the country. Industry sources had previously predicted that two tenders would be issued by the middle of 2008.

It is understood that Germany’s Fichtner is carrying out feasibility studies for several possible independent water and power projects on behalf of an as yet unnamed major foreign developer (MEED 12:10:07).

Tripoli recently set up a committee to consider IPPs and independent water and power projects (MEED 9.3.07).

Gecol Projects in numbers

Cost of Tripoli West power plant project: $1.3bn

Capacity of Tripoli West plant: 1,400MW

Cost of plant at Sebha: $650m

Capacity of Sebha plant: 750MW

Source: MEE

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