Public-private partnership (PPP) body has been restructured to encourage progress
The Kuwait Authority for Partnership Projects (KAPP), formerly the Partnerships Technical Bureau (PTB), has invited developers to prequalify for the countrys next two independent water and power projects (IWPPs).
KAPP has invited interested groups to submit prequalification entries by 2 April for both the Al-Zour North 2 IWPP and the Al-Khairan 1 IWPP.
The request for qualification for the major power and desalination projects is the latest sign that the countrys restructured public private partnerships (PPP) body is ready to make progress with much-delayed infrastructure schemes. MEED recently reported that the newly formed KAPP had been reinstated with the mandate to oversee the development of the countrys metro and national rail projects.
The Al-Zour North 2 IWPP will have a power capacity of at least 1,500MW, to be provided through combined-cycle gas turbines, and a desalination capacity of 102 million imperial gallons a day (MIGD).
The Al-Khairan 1 IWPP is planned to have the same capacity as the Al-Zour North plant, but will run on low sulphur fuel oil (LSFO) as its primary fuel. The plant will be designed so that it can accommodate crude oil, gas-oil and natural gas as back up fuels. The desalination capacity of the plant is scheduled to be 125MIGD.
Progress with both projects had stalled as a result of the restructuring of the PTB and the creation of KAPP. Companies had been invited to submit expressions of interest (EOI) for both projects in 2013. The restructuring of Kuwaits PPP body, which happened in parallel with the amendments of the countrys PPP and IWPP laws, was implemented in response to the slow procurement process for the countrys first PPP project, the Al-Zour North 1 IWPP.
IWPP opportunities in Kuwait
The request for qualification for the IWPPs has been welcomed by companies in the regions power and water sector, which have been left frustrated with the slow progress of the Kuwaiti market.
Kuwait is the one weve been waiting for, says an international developer active in the Gulfs utility sector. We have been hearing about the potential for so long, but only one project has been awarded. Hopefully, now the market will pick up momentum.
The demand for power and water in Kuwait is unquestionable. Kuwaits Ministry of Electricity and Water (MEW) forecasts that peak power demand will climb from 12,800MW in 2013 to 14,000MW in 2015 and to 22,500MW by 2022. To meet the demand and build in a reserve margin of about 10 per cent, the ministry estimates that available conventional power capacity will have to reach 25,500MW by 2022, an 80 per cent growth in capacity.
The ministry forecasts that an additional 270MIGD of desalination capacity is required to meet the estimated demand by 2020.
The final project agreements for the much delayed Al-Zour North IWPP were signed in December 2013, marking conclusion of the countrys first PPP scheme. The project company set up to develop the IWPP, which is 40 per cent owned by a consortium of the UK/French GDF Suez, Japans Sumitomo Corporation and local Abdullah Hamad al-Sagar & Brothers, awarded South Koreas Hyundai Heavy Industries (HHI) and Frances Sidem the $1.4bn EPC contract to build the plant.
HHI will build the gas-fired 1,500MW, combined-cycle power plant, while Sidem will build the 107 million gallon-a-day desalination component of the first Al-Zour project.
In addition to the ambitious IWPP programme and rail schemes, KAPP is also set to oversee the development of the 500,000 cubic metres a day (cm/d) Umm al-Hayman wastewater treatment plant and the Al-Abdaliyah Integrated Solar Combined Cycle (ISCC) power facility, which will run on a combination of gas and solar energy. Both of these projects have been in the planning stage for a number of years, but have also suffered from stalled process.