Kuwait Invites Bids for 1.8GW Power and Water Project

Kuwait has opened bids for the first phase of the 1.8 gigawatt power Al Khairan power and water project, which aims to help alleviate the Gulf nation's power shortages.

Pre-qualified international consortia were invited to submit bids for the Al Khairan Phase 1 Independent Water and Power Producer project, which will also produce 125 million imperial gallons of water a day, the Kuwait Authority for Partnership Projects said.

Kuwait, an OPEC member and major oil producer, has been facing a severe power shortage due to rapid population growth, urban expansion, rising temperatures and maintenance delays at some plants, forcing the government to impose planned power cuts in some areas since last year.

Three consortia were invited to submit proposals: one led by Abu Dhabi National Energy Company (TAQA); the second led by Saudi Arabia's ACWA Power; and the third led by China Power International Holding. Other qualified companies are Nebras Power and Sumitomo Corporation.

The project will be developed under a public-private partnership model and will involve the "financing, design, construction, operation, maintenance and transfer" of the plant, which will be located 100 km (about 62 miles) south of Kuwait City along the Gulf coast, KAPP said in an announcement published on Sunday by Al-Rai newspaper.

The winning bidder will form a project company to sign a 25-year deal to sell power and water to the government, KAPP said.

Under the PPP framework, companies are set up to carry out projects managed by a strategic partner. The partner, who can be Kuwaiti, foreign or a consortium of investors, is allocated 26% to 44% of the company's shares.

A 50% stake is offered to Kuwaiti citizens and the remainder retained by the government.

KAPP in August signed over $3.27 billion of contracts with ACWA Power and Gulf Investment for Al-Zour North phases 2 and 3.