Saudi Arabia may switch Jeddah South power project to IPP

30 August 2016

The 1,300MW expansion was tendered as an engineering, procurement and construction contract earlier this year

Saudi Electricity Company (SEC) is reportedly considering switching the procurement model of the planned second phase of the Jeddah South power plant to an independent power project (IPP).

MEED reported in May that the utility had invited 15 prequalified firms to bid for the engineering, procurement and construction (EPC) contract. However, according to sources familiar with the scheme, SEC is considering switching the procurement model and bringing the project back to the market under the IPP model in 2017.

The second phase of the Jeddah South project is planned to involve the installation of two new units, which will increase the capacity of the existing 2,640MW oil-fired plant by about 1,300MW. Contractors have until 25 September to submit bids for the EPC deal.

The Jeddah South expansion is the latest of several major power schemes in the kingdom originally planned to be built under standard EPC contracts that may switch to IPP or EPC-plus-financing structures.

MEED previously reported that the procurement models for SEC’s planned 3,780MW Taiba integrated solar combined-cycle (ISCC) and state oil major Saudi Aramco’s under-construction 2,400MW Jizan power plants may be changed, with both schemes having been tendered as EPC deals.

The move back towards the IPP and independent water and power project (IWPP) models is part of the kingdom’s efforts to cut its capital expenditure and reduce the rise in government budget deficits brought on by the fall in oil prices.

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