South Korea’s Hyundai Heavy Industries (HHI), in partnership with France’s Sidem, has confirmed it has been awarded the $1.4bn contract to build the Al-Zour North independent water and power project (IWPP) in Kuwait.

HHI will build the gas-fired 1,500MW, combined-cycle power plant, while Sidem will build the 107 million gallons a day (g/d) desalination component of the Al-Zour project. The consortium is scheduled to complete the construction of the IWPP in the fourth quarter of 2016.

Hyundai and Sidem signed contracts with Shamal Al-Zour Al-Oula, the special purpose vehicle (SPV) company awarded the contract to build and operate the Al-Zour project, on 12 December, the same day the project company signed the energy conversion and water purchase agreement (ECWPA) with Kuwait’s Ministry of Electricity and Water (MEW).

The project company is 40 per cent owned by a consortium of the UK/French GDF Suez, Japan’s Sumitomo Corporation and local Abdullah Hama al-Sagar & Brothers, with 10 per cent held by Kuwait’s sovereign wealth funds Kuwait Investment Authority and Public Institution for Social Security.

The remaining 50 per cent of the shares were subject to an initial public offering (IPO) that was fully subscribed earlier this year.

The Al-Zour North IWPP has long been viewed by those in Kuwait’s projects and finance sectors as a key project for Kuwait’s ambitious PPP programme. As the Partnerships Technical Bureau’s PTB’s first project, it is regarded as a catalyst for the rest of the country’s planned schemes, which require private investment.

When financial close for the Al-Zour North IWPP is reached, the PTB and the MEW will push ahead with the next phase of the Al-Zour development, Al-Zour North 2 IWPP. In June, the PTB invited companies to express interest in the second phase of the Al-Zour scheme, which will have similar scope and the same power and water desalination capacities as the first phase.