Tunisia cancels independent power project

07 December 2010

Cancellation of Bizerte power project casts doubt over Tunisia’s commitment to IPP model

Tunisia’s Industry, Energy & Small & Medium Enterprises Ministry has cancelled its plans to develop an independent power project (IPP) at Bizerte.

The ministry received bids from three consortiums in May, but has since decided to scrap the project and notified the bidders of its decision on 30 November.

Bids were submitted by the following partnerships:

  • Siemens (Germany)/Powertek (Malaysia) – offer priced at 105.337 millimes ($0.07) per kilowatt hour (kWh) based on a power plant with a capacity of 405MW
  • International Power (UK)/Marubeni (Japan) – offer priced at 124.754 millimes per kWh based on a power plant with a capacity of 423MW
  • Mitsui (Japan)/Taqa (UAE) – offer priced at 128.888 millimes per kWh based on a power plant with a capacity of 435.9MW

The 350-500MW Bizerte IPP was scheduled to come online in 2014. The winning bidder was to develop the project on a build-own-operate basis under a 20-year concession.

State utility Societe Tunisienne de l’Electricite et du Gaz (Steg) was to buy the plant’s output. Under the original plan, the developer was to have the option to double the capacity of the plant at a later date.

According to the ministry, the bids have been evaluated and determined too high in price. As a result, the tender has been declared void.  Industry sources have said that the cancellation could also be the result of a priority shift in favour of engineering, procurement and construction (EPC) projects.

Steg awarded a €240m contract to Italy’s Ansaldo Energia and Canada’s SNC-Lavalin to design and construct a 420MW gas-fired, combined cycle, thermoelectric power plant early in December. The facility will be built on an EPC basis in Sousse on the Bay of Hammamet next to an existing project.

The cancellation of Bizerte IPP has cast doubt over Tunisia’s commitment to the independent power plant model. Another IPP is planned for a site at Elmed, which is also planned to include a renewable power unit of at least 100MW capacity.

The project will have a total capacity of 1,200MW, of which 400MW will supply the local utility Steg. The remaining 800MW will be exported to Italy through an interconnection project to be built by Steg in partnership with Italian company Terna.

The Tunisian Industry and Technology Ministry issued a request for qualification (RFQ) for the 1,200MW Elmed IPP in April, but progress has since been slow. A request for proposals (RFP) was set to be issued in October/November according to sources at the ministry, but has not yet materialised.

The planned commissioning date for both the Elmed power generation scheme and the interconnection project is 2016-17. However, delays in the tender process have already set the project timetable back. The IPP was originally to come online in 2015-16. The cancellation of the Bizerte project is likely to result in further delays for the Elmed power plant.

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