Energy Economy

01 Sep 2021

Kuwait Seeks Investors to Finance Three Power Projects

01 Sep 2021  by Reuters   

Kuwait plans to attract outside investors to fund several power projects under a public-private partnership programme that will cover more than half of its future electricity needs over the next two decades, a government official said.

About 7,500 megawatts (MW) of the 14,000 MW it needs over the next 20 years will come through these partnerships, which industry sources say will require investments of billions of dollars.

"Energy projects are priority projects, and the state is moving forward towards their implementation," Fadheela A. al-Hassan, who was appointed head of the Kuwait Authority for Partnership Projects in April, told Reuters. "There is a desire to rush such projects,"

The projects under the public-private partnership (PPP) umbrella include the Al-Zour 2 & 3 plant, which has a capacity of 2,700 MW; Al-Khiran, with 1,800 MW of capacity; and Al-Shaqaya and Al-Debdiba, with a combined capacity of 3,000 MW, the authority said.

The PPP programme in Kuwait is based on the creation of public shareholding companies that carry out projects managed by a strategic partner, and the goods and services produced are purchased by the government.

According to the law, 50% of the shares of these companies is allocated to Kuwaiti citizens, while between 26% and 44% is allocated to a Kuwaiti or foreign strategic investor, and the government owns the rest.

Kuwait's electricity capacity is estimated at 17,000 MW, and about 14,000 MW are scheduled to be added over the next twenty years, according to Kuwaiti media.

Al-Hassan expects the "financial closing" of the Al-Debdiba and Al-Shaqaya project will be in 2026, including the awarding of strategic investors and the establishment of project companies.

In 2020, the Al-Debdiba project merged with the Shaqaya Renewable Energy Project into one project aimed at producing at least 3,000 MW of electric power.

Al-Hassan said the feasibility studies for the Al-Zour 2 & 3 and Al-Khiran projects had been completed "and they are in the process of being approved now" by the board of the authority as part of preparations to qualify under the PPP plan.

She expected the qualification procedures would begin in the fourth quarter of 2021.

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