Kharafi National targets July completion for two Egyptian power plants

05 January 2011

Projects to add 1,500MW additional capacity in time for the summer

Kuwaiti contractor Kharafi National is aiming to complete the construction of two 750MW gas-fired power plants in Egypt by July 2011.

Construction of the plants at Damietta and Shabab has started and will use open-cycle gas turbines manufactured by the US’ GE.

While the engineering, procurement and construction (EPC) contract to build the projects was only signed in October 2010, Kharafi aims to complete the construction of the first project by June 2011 with the second online by July 2011.

The timescale is highly ambitious, but according to a source at Kharafi, the company “has the letter and turbines and so there will be no delay”.

The turbines for the Damietta and Shabab power plants were originally to be installed at Subiya in Kuwait before the government cancelled the tender for the engineering, procurement and construction (EPC) contract three years ago.

The tender for the “fast track” project was similarly swift. Egypt received three bids to build the two projects in late-September 2010. Kharafi National competed against the US’ GE and Italy’s Ansaldo Energia.

The Kuwaiti company submitted the lowest price with the promise of completing the work sooner than its competitors. By October 2010, Kharafi had been selected to build the plants and had started construction at the sites.

The importance of delivery time is particularly important in Egypt. The country’s insufficient power generation capacity has resulted in summer power cuts of increasing frequency and severity.

Egypt has 25,000MW of power-generation capacity in operation and peak demand is currently exceeding 23,500MW. As the economy expands at a rate of 5-6 per cent and the population continues to swell at an even higher rate, the government will need to move quickly if it is to keep pace with demand.

Kharafi, along with several other developers, has also engaged in discussions with the Egyptian government for an independent power project (IPP). The project, which was proposed for a site at West Damietta, would have a capacity of 750MW. According to sources close to the deal, negotiations are expected to be revived once the government’s tender for the country’s first IPP at Dairut is complete.  

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