Kuwait turns corner on water and power schemes

29 August 2020
Transaction advisory bids evaluation is under way for giant water and power public-private partnerships following two failed attempts

Shamal Az-Zour al-Oula Power & Water Company, the entity that owns and operates Kuwait’s first independent water and power project (IWPP), Al-Zour North 1, started trading on the Kuwait bourse on 16 August.

The listing marked the culmination of the country’s first IWPP project, as envisaged in the country’s regulatory framework.

Kuwait was the first GCC state to introduce a PPP law and executive regulations in 2008, and these were revised and replaced in 2014. The country enacted a separate IWPP law in 2010.

Kuwait’s ambitious PPP programme, however, has struggled to take off since 2013, after it awarded the contract to develop Al-Zour North 1.

The revised PPP law and regulations, along with the restructuring and renaming of the procurement authority into Kuwait Authority for Partnership Projects (Kapp), have not helped to push more projects beyond the advisory stage, with the exception being the $1.7bn Umm al-Hayman independent wastewater project, which reached financial close in January.

Turning point

There are signs that Kuwait and Kapp are finally turning the corner on the country’s multibillion-dollar PPP programme, however.

Manager of research at Kapp’s strategic planning, risk and compliance office, Nayef al-Haddad, said in a recent virtual forum organised jointly with the World Bank, that “the years 2020-25 look promising to Kapp”, as it focuses on the delivery of three key projects: Al-Zour North 2 & 3, the Al-Khiran 1 IWPP and the Shagaya renewable energy complex.

Following two failed attempts in 2017 and 2019, Kapp is undertaking bid evaluation for the transaction advisory contract for the two IWPP packages, which have a total combined power generation capacity of 4.5GW and a desalination capacity of 290 million imperial gallons a day.

The parliament’s non-involvement in the tendering, bid evaluation and contract award processes increases the likelihood that these projects will move through to the execution phase during the intended five-year period

The expected completion of the Al-Zour liquefied natural gas (LNG) terminal – designed specifically to meet the country’s growing power generation needs – is understood to be a compelling incentive for the schemes.

The parliament’s non-involvement in the tendering, bid evaluation and contract award processes also increases the likelihood that these projects will move through to the execution phase during the intended five-year period. However, the same cannot be said at this time of the Kuwait national rail road and metro schemes, which continue to face delays.



 

> Algeria: PPP framework fails to modernise
> Bahrain: Manama ramps up its PPP plans
> Egypt: Mixed results for Egyptian PPPs
> Iraq: Crises and protests curb Iraq PPPs
> Jordan: Construction sector eyes PPP opportunities
> Kuwait: Corner turned on water and power schemes
> Lebanon: PPPs offer route to recovery
> Morocco: Rabat reforms legislation to spur PPPs
> Oman: Muscat risks PPP confidence loss
> Saudi Arabia: Riyadh refocuses PPP plans
> Tunisia: PPP plans draw broad support
> UAE: PPPs expected to take off in UAE
> Other GCC: Gulf state bolsters legislation to drive PPPs

 

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