At MEED’s recent Kuwait Projects conference, it was evident that the government’s infrastructure clients are prioritising meeting the rising demand for power and water throughout the country.

The country’s public-private partnership (PPP) body, Kuwait Authority for Partnership Projects (KAPP), outlined plans to press ahead with 3,280MW of new capacity PPP power projects in 2016, which was followed by the Ministry of Electricity and Water (MEW) pledging to procure up to 6,000MW of generation facilities through the engineering, procurement and construction (EPC) model in the coming years.

“The Ministry is going to procure projects alongside the PPP programme to ensure that progress is faster,” said Suhaila Marafie, director of studies and research, MEW, at the event.

Growing demand

Peak demand growth for electricity in Kuwait grew by 2.9 per cent in 2014, and is expected to continue increasing by 3 per cent a year until 2030, according to MEW. To meet this forecast, demand will require an additional 17GW of power generation capacity by 2030.

The demand is being driven by sustained population growth, which averaged 3.1 per cent a year between 2008 and 2012, and efforts to boost the country’s industrial sectors and raise oil production levels to 4 million barrels a day (b/d) by 2020.

From the additional power demand required by 2030, by far the largest proportion, 12GW, will be required for new housing projects.

Other sectors that will require additional power include Kuwait Oil Company (KOC) upstream energy projects (1.2GW), Boubyan Island development (900MW) and Kuwait National Petroleum Company’s (KNPC’s) New Refinery and Clean Fuels Projects, which will require 0.8GW of electricity.

Kuwait’s population and industrial growth is also resulting in a rapidly increasing demand for additional desalinated water capacity. MEW estimates that the country will require an additional 450 million imperial gallons a day (MIGD) by 2030 to meet requirements.

As with the power sector, the housing sector will require the largest supply of new water.

MEW forecasts that new residential areas will need 200MIGD of additional water capacity by 2030. The ministry estimates that the industrial sector will require 100MIGD, while 50MIGD should be made available for the New University and Boubyan island developments.

Dual approach

The 12 months following the long-awaited contract award for Kuwait’s first independent water and power project (IWPP), Al-Zour North 1, in late 2013 represented a significant period for Kuwait’s PPP programme.

Due to a number of delays during the tendering and bid evaluation stage for the maiden Al-Zour project, the government implemented some major reforms to the country’s PPP body and laws in 2014.

In addition to restructuring and renaming the country’s PPP body, previously the Partnerships Technical Bureau (PTB), amendments were made to both the PPP and IWPP laws.

One of the amendments made to the country’s IWPP legislation in 2014 was that MEW would regain the ability to procure power generation projects with a capacity of greater than 500MW, a right that had been reserved for the country’s PPP unit following the enactment of the original IWPP statute in 2010.

Following the increased remit for MEW, it is planning to procure 6,000MW of capacity over two phases at Nuwaiseeb in the coming years.

The ministry plans to tender the first phase of the Nuwaiseeb scheme in 2016, which is expected to have a power generation capacity of 3,000MW and a desalination component of 75MIGD.

However, while state funded EPC projects from MEW will form an important part of the country’s power and water projects strategy, KAPP, will remain the key client in charge of procuring Kuwait’s ambitious power and water plans.

With oil prices set to remain subdued for the foreseeable future, success with the planned PPP utilities schemes will be important to reducing pressure on government balance sheets.

Upcoming schemes

The next two major IWPP projects planned are the Al-Zour North 2 and Al-Khiran 1 IWPPs.

The Al-Zour North 2 plant will have a power generation capacity of 1,800MW and a desalination component of 107MIGD. The facility will use gas as its primary fuel, and prequalified consortiums have been invited to submit bids in January.

KAPP is planning to issue tenders for the Al-Khiran 1 IWPP in the first quarter of 2016. The plant will have a generation capacity of 1,500MW and a desalination limit of 125MIGD.

Unlike the gas-fired Al-Zour North 1 and 2 projects, the Al-Khiran 1 IWPP will run on low-sulphur fuel oil (LSFO).

Kuwait is also planning to integrate a sizeable renewable energy programme over the next 15 years into its power sector. The emir has set a target for renewables to contribute to 15 per cent of the country’s power production by 2030 as part of efforts to reduce reliance on burning oil for power generation.

Following contract awards for the initial pilot renewables projects for the Kuwait Institute for Scientific Research (Kisr) in 2015, KAPP has invited prequalified groups to submit bids for the Al-Abdaliyah integrated solar and combined cycle (ISCC) independent power project (IPP), which is planned to have a solar capacity of 60MW, by 17 March 2016.