The project stands out against a regional market dominated by independent power and water projects (IWPPs).
The majority of the kingdom’s IWPPs are handled by the Water & Electricity Company, in which SEC holds a 50 per cent stake.
“SEC has been party to the WEC process, which is largely driven by water demand,” says Bill Appleby, director of infrastructure and energy finance at Citi, the financial consultant on the project.
“The Rabigh IPP is driven by SEC’s requirement for power generation capacity. This is unusual in the current Middle East market in having no water component.”
Two other major projects will be on the market at the same time as Rabigh, however, and there is likely to be competition to attract developers.
Bids for WEC’s Ras al-Zour IWPP are due in May, while the Power & Water Utility for Jubail & Yanbu (Marafiq) is due to issue a request for proposals for an IWPP at Yanbu soon.
“The Rabigh request for proposals will be issued before the receipt of bills for Ras al-Zour,” says Appleby.
“But there are invariably multiple tenders in the market at any one time.”
Given SEC’s involvement in both the Rabigh and Ras al-Zour plants, they are likely to be co-ordinated in terms of the timing of awards and the raising of finance.
SEC hopes that the Rabigh plant, at 1,200MW, will involve enough capital investment to attract developers, without being so large that it places excessive strain on equipment suppliers and contractors.
In addition, the project only has a power component, which makes it less complex and therefore more manageable than an IWPP.
Companies have until 14 January to express interest in the Rabigh IPP. The tender will be issued in the first quarter of the year. SEC is planning two more IPPs in Riyadh and Al-Qurraya.