Moment of truth for IPP

16 November 2001

The government is expected to decide by the end of December whether to accept the latest financial proposal submitted by Belgium's Tractebelfor the Kherbet al-Samra independent power project (IPP). Tractebel has been in negotiations with the government about the 450-MW plant since November 1999, when it submitted the lowest tariff proposal for the estimated $300 million project. The cabinet was scheduled to meet in early December to review plans for the IPP, which will be awarded on a build-own-operate (BOO) basis.

The combined cycle power generation plant will burn natural gas delivered by the proposed Egypt-Jordan transmission pipeline. The government is keen to integrate both projects at an early stage of development, the sources say. Tractebel is understood to be among the prospective bidders for the 370-kilometre pipeline, which will transport Egyptian gas from Aqaba to the Kherbet al-Samra IPP and other combined cycle power stations near Amman. Bids for the contract to buld the pipeline are due on 22 December (MEED 23:11:01).

The Kherbet al-Samra plant will provide for up to 30 per cent of Jordan's energy needs when it comes on line in 2005. Energy demand has been growing at an average rate of 4 per cent a year in the last decade. The cost of imported energy amounts to nearly 10 per cent of the kingdom's gross domestic product (GDP) and 40-45 per cent of its total export earnings.

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