Tractebel pulls out of Al-Samra IPP

06 December 2002

After more than three years of negotiations with the government, Belgium's Tractebelhas confirmed that it has decided not to proceed with the proposed Kherbet al-Samra independent power project (IPP). The decision was made two months after engineering, procurement and construction (EPC) bids were submitted for the project, and only a day before the company was due to submit its final tariff proposals to the Energy & Mineral Resources Ministry on 25 November. Tractebel also pulled out of the running for Abu Dhabi's fourth independent water and power project (IWPP) at Umm al-Nar, shortly before proposals were submitted on 18 November (MEED 22:11:02; 13:9:02).

'The decision not to participate in both projects was taken at a very high executive level withinthe Suez Group[Tractebel's French parent company],' a Tractebel spokesperson told MEED on 4 December. 'The main reason is the current troubled situation in the global markets.'

Tractebel's withdrawal from Al-Samra was unexpected. In addition to EPC bids being under evaluation, banks responded in mid-November to a preliminary information memorandum, sent out by Tractebel, for the project's financing.

The government has emphasised that, despite Tractebel's withdrawal, it is keen for the Al-Samra power project to go ahead as quickly as possible. The $300 million plant is intended to come on stream in 2005, in time for the first deliveries of gas from the Egypt-Jordan transmission line. However, the capacity of the plant may be scaled down to 300 MW from the 450 MW quoted in the original tender documents.

'We will have to make an amendment to the IPP proposals, but as we had no notice from Tractebel we haven't had the time to make a firm decision,' Energy & Mineral Resources Minister Mohammed Batayneh told MEED on 4 December. 'One possibility is to ask Cegco (Central Electricity Generation Company) to issue an EPC tender, but we are already talking with new investors from abroad, so we may be able to put together a private consortium.' A decision is expected by the end of December, he added.

With demand expected to grow by 4.5-6.5 per cent a year over the next decade. Cegco plans to provide additional capacity of 100 MW in 2003, 100 MW in 2004, 450 MW in 2005 and 300 MW in 2008. Following the establishment of a regulatory commission for the power sector last year, a new law providing the framework for private sector investment is expected to be issued in early 2003.

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