Although it has yet to officially abandon the project, the company has confirmed to MEED that the scheme is no longer of interest. Gama says its change of attitude is due in part to the slow progress the government has made on developing the project.

However, its decision is also thought to be linked to a change in corporate structure at the Turkish firm. In December 2007, the US’ GE bought a 50 per cent stake in Gama Energy and the new joint development plan between GE and Gama does not foresee any investment in Yemen in the near future.

Gama is part of a developer group that includes France’s Litwin, the UAE’s Lootah Group and a local company. It is unclear whether the remaining partners will pursue the project to build the 480MW project in Mabar, south of Sanaa.

Litwin and Lootah Group could not be reached for comment.

It is not the first time Yemen has faced difficulties with an IPP. Plans to develop the 400MW Marib phase II plant as an IPP, were scrapped in 2005.

Instead, the state-owned Public Electricity Corporation is evaluating bids from four companies for the engineering, procurement and construction (EPC) contract on the plant.

The first phase 341MW plant at Marib is due to be completed in August. Germany’s Siemens and Saudi Arabia’s Arabian Bemco Contracting are the EPC contractors (MEED 15:6:07).