The three frontrunners are HSBC, Gulf Investment Corporationand Societe Generalewith Arab Banking Corporation.
‘In principle an award is imminent, but in reality it will still be some time before a decision is taken,’ says one of the bidders. ‘There are two unresolved factors which could easily slow the process down: the situation in Iraq; and negotiations over the gas initiative. Both are uncertain.’
Three other bids tabled for the financial advisory mandate came from Credit Suisse First Boston, Citibankwith Saudi American Bankand ANZ Investment Bank with Riyad Bank(MEED 20:12:02). SEC/SWCC are also evaluating technical and legal advisory bids.
The scope of works includes four IWPPs: Shouaiba and Shuqaiq on the Red Sea coast and Ras al-Zour and Jubail on the Gulf coast. Bidders were asked to price a base offer for only the Red Sea projects and an alternative comprising all four plants. The Shouaiba, Ras al-Zour and Jubail projects are all about 2,000 MW, while the Shuqaiq project is slightly smaller.
The three larger projects were originally planned as part of the kingdom’s gas initiative. The Shouaiba plant was to have been included in core venture 2, the part of the initiative now thought least likely to go ahead. The Jubail and Ras al-Zour plants fall within core ventures 1 and 3, which are still under negotiation between international oil companies and the government.
SEC and SWCC have set up a 50:50 joint venture company to carry out the IWPPs in partnership with a developer. The development company will then sell both the power and water to an offtaker, also owned by SWCC and SEC. The government has offered guarantees for the purchase of both products.