Kurdistan launches tenders for 6GW of independent power projects

26 July 2011

Kurdistan presses ahead with IPP programme while Baghdad abandons its private power scheme

The Kurdistan Regional Government’s Electricity Ministry has invited expressions of interest from developers for a series of independent power projects (IPPs) to be built across the autonomous region.

The IPPs will add 6,000MW power capacity in total. Sources close to the Kurdistan Regional Government (KRG) have indicated that the programme is likely to be carried out in 2,000MW phases comprising several separate IPPs.

Expressions of interest are to be submitted by 15 September. Developers will be invited to submit proposals for projects using natural gas or heavy fuel oil (HFO) as fuel or hydropower.

International developers will be eligible to participate in the tender, as well as local companies. The winning bidders will design, supply, construct, commission, operate and maintain the IPPs.

Expressions of interest and proposals have also been invited for a 400kV network for the region as a whole or in part, and this should include the links to the existing 132kV network.

Meanwhile in Baghdad, Iraq’s Electricity Ministry has decided to tender its former IPPs as engineering, procurement and construction (EPC) contracts.

The ministry estimated that about $927m would be sufficient to cover EPC contracts for the four former IPPs at Diwaniya, Al-Samawa, Amara and Shat al-Basrah to add 2,750MW to Iraq’s grid.

According to a source close to the programme, the ministry is putting together EPC packages for each project, which will be tendered, although the $927m that was allocated for the power programme is no longer available due to a recent cabinet decision on the budget.

Baghdad shelved its plans to develop the projects as IPPs in May as a result of the bid prices it received and experience of the bidders (MEED 10:6:11).

Iraq’s Oil and Energy Parliamentary Committee then considered different structures, including an EPC hybrid that allows private investors to provide some of the capital expenditure (capex).

“We have decided to find a new approach for investment,” said Ala Disher Zamil, head of the IPP programme at the Electricity Ministry, in June. “[We are looking at] creating special-purpose companies as joint ventures between the Ministry of Electricity and the Trade Bank of Iraq with some investors to erect, commission and operate these four projects.”

The Iraq IPP programme evolved many times before it was launched. The original scheme comprised eight projects, before it was revised down and later aborted.

Unlike the rest of Iraq, Kurdistan has experience in developing private power capacity. To date, this has been in the form of bilateral negotiations with Jordan-based developer Mass Global, which has developed more than 90 per cent of the region’s power generation capacity.

The company has developed three power projects in the country at Dohuk, Suleimaniyah and Irbil. The Dohuk power project has a total capacity of 500MW and Suleimaniyah has a generation capacity of 750MW. Both projects are fully operational.

The first five units of the Irbil project are currently in operation and generate 625MW. Another unit was scheduled to be commissioned on 15 July, followed by unit 7 on 15 October and unit 8 on 15 December, resulting in a total power capacity of 1,000MW at Irbil.

Mass Global also plans to convert the simple cycle power plant at Irbil to combined cycle. According to Mass Global power projects manager Abdul Qader Ahmed, Mass Global is keen to participate in the competitively tendered IPP programme too.

Citizens in Iraqi Kurdistan will benefit from access to power for 24 hours a day by the end of 2011. This represents a significant improvement for the region, which had access to only two hours of power a day six years ago (MEED 15:6:11).

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