The initial bid meeting with banks to finance its first project, the Shuweihat IWPP in the UAE, took place on 12 September 2001, the day after the terrorist attacks in the US.
“It was not the best time to finance a project in the Middle East,” says Ranald Spiers, CEO, Middle East and Africa region, for International Power. “Gaining financial close for that project was crucial.”
Regional head: Ranald Spiers
Equity power capacity (GCC): 2,614MW
Other developments include the brownfield Umm al-Nar IWPP contract in March 2003 and the Fujairah 2 IWPP tender in the UAE in August 2007.
Spiers says the company’s refusal to be deterred by the geopolitical issues that have caused competitors to hesitate or exit Middle East markets is one of the principal reasons behind its success in winning tenders.
Its steadfast commitment to the Gulf has reaped rewards, including winning a string of contracts to develop the region’s first wave of private power and water projects, which has set it on a good footing to secure further tenders and build a portfolio of plants that are now operational.
Yet even with such a proven track record, Spiers says International Power cannot afford to become complacent, and in today’s highly competitive market, it still has to work hard to find an edge over other bidders.
“To win a tender, you obviously have to get your EPC strategy right, with the optimum configuration and the best contractor,” says Spiers.
“The contractor has to be keen and focused and you have to have a good, competitive operation and maintenance arrangement, but I think the key is sometimes being prepared to do things differently.”
For example, in its Fujairah 2 IWPP bid, International Power took the risk of using a new fuel-efficient gas turbine to give it greater profit margins.
When it comes to selecting project partners, International Power has a simple and pragmatic approach. “We partner with people that give us a good chance of winning,” says Spiers.
The company often teams up with Japanese firms to access low-cost financing from the state-owned Japan Bank for International Co-operation. On other occasions, the choice of partner is determined by the technology required for the project.
“We partnered with CMS in Shuweihat as it had knowledge of desalination and we did not,” says Spiers.
“In Umm al-Nar, we partnered with Tokyo Electric as it was an investor in the region and was keen to help us get a low price from Toshiba.”
International Power is well positioned to deal with the challenging EPC climate, working closely with most major contractors.
At a time when many projects are suffering delays, International Power completed the Ras Laffan B IWPP in Qatar ahead of schedule. The secret is active project management, says Spiers.
“We anticipate the problems and we guide our contractor based on our own experience,” he explains. “If it is deviating from the path, we bring it back. I
“f you are not an experienced developer, it is very easy to let the first year slip by, and you do not see the delays as all you see are holes in the ground.”
International Power is following a strategy of expansion across all five continents so that its turnover is protected from a downturn in any one market. Spiers is satisfied with the pace of its progress in the Middle East and hopes to continue winning at least one major project a year over the next decade.
It is also seeking to get involved in renewable-energy projects, and does not rule out participating in a future nuclear programme.
“If we were to be involved, we would have to partner with someone who has nuclear capabilities, and that would probably be a Japanese or [South] Korean firm, and we would be the local partner,” says Spiers.