The concept of private power generation has gained a strong following in the Gulf. Five out of six GCC states have independent water and power projects (IWPPs) on the drawing board, while long-awaited progress has been seen on private projects in the wider region.

Encouraged by the savings in both cash and time, regional governments are also increasingly looking at outsourcing water and wastewater projects. History is not entirely favourable. The Taweelah reverse osmosis (RO) project in the UAE has been on the drawing board for many years, while the Muscat wastewater project, which envisages a private company expanding and managing the capital’s sewage treatment network, foundered over lack of interest and is instead currently being implemented by the government, with plans to privatise at a later date.

However, Muscat – long a pioneer of private power – is now also at the forefront of the privatisation of water provision. An independent water project (IWP) to serve the Sharqiyah region was tendered in mid August, and local contractors report healthy interest already in the scheme. Bahrain, a recent but enthusiastic convert to the private utilities model – unsurprisingly given the price submitted for its debut Al-Ezzal independent power project (IPP) in 2004 – recently issued a request for proposals (RFP) for a brownfield IWPP. The project calls for the addition of 60 million gallons a day (g/d) of desalination capacity at the Hidd power and water complex. Officials at the Ministry of Finance (MoF) say that close to 15 international companies have been prequalified. The response is impressive, particularly since privatisation of the Hidd facility has been on the cards for many years. Other delayed schemes are also beginning to move again. Project agreements were recently signed for the Skikda desalination facility in Algeria with a Spanish team, although several other projects in the country have again been held up by a new government requirement that finance comes from local rather than international banks in order to absorb excess liquidity in the banking system.

Isolated incidents

But water privatisation, while counselled by institutions such as the World Bank, remains in its infancy. ‘There is no particular trend towards private water in the region,’ says an international developer. ‘Oman is always first to privatise and Bahrain is influenced by the World Bank more than others in the GCC.’ Private power, by contrast, is all the rage in the Gulf and the wider region. Developers hoping for a quiet summer have been confronted by multiple demands for their attention: in Oman, by the Barka/Rusayl brownfield IWPP, tendered in mid August; in Saudi Arabia, by the changing face of the Marafiq IWPP; and in the UAE, by the issue of the RFP for the Fujairah IWPP, for which responsibility was recently transferred to Abu Dhabi Water & Electricity Authority (ADWEA). And if proof were needed of the rising commitment of governments in the region to outsourcing generation, developers could watch the signing of the key project agreements on the captive independent water, steam and power project (IWSPP) for the Rabigh refining and petrochemicals complex, and survey the progress of the financing of the Shouaiba IWPP in Saudi Arabia or the Taweelah B IWPP in Abu Dhabi – the region’s biggest ever. Even Dubai, which along with Kuwait has been the GCC’s most stubborn resistor of private power, appears to be having a rethink: bids went in recently for an advisory mandate looking at the financing of future power and water projects.

New life

Away from the Gulf, where the challenge of financing utilities to serve the region’s burgeoning population are more testing, private power projects are also accelerating. Plans for IPPs at Marib in Yemen and Al-Manakher in Jordan are enjoying renewed life. Talk of privatising Electricite du Liban has been revived, conting