Acwa Power, a utility developer in Saudi Arabia, and Gulf Investment Corporation, its partner, have inked a deal with Kuwait to invest $4 billion in the development of two phases of the Az-Zour North water and power plant.
In order to assist the nation in addressing its acute electricity shortages, an agreement was signed on Sunday with the Kuwait Authority for Partnership Projects (KAPP).
According to a statement released by Acwa Power and GIC on Sunday, the Az-Zour North project’s phases two and three will have a desalination capacity of 120 million gallons of water per day and a net power generating capacity of at least 2.7 gigawatts
The consortium led by Acwa Power will design, finance, construct, operate, maintain, and transfer the plant and its related facilities over the course of a 25-year contract.
The managing director and vice chairman of Acwa Power, Raad Al-Saady, stated, “This investment demonstrates our dedication to Kuwait’s growth vision.”
The agreement supports Kuwait’s efforts to expand its water infrastructure and increase its capacity to generate electricity.
Due to demand exceeding available capacity, Kuwait recently had to impose temporary power outages in a few industrial and agricultural areas.
Kuwait has previously struggled with problems related to the supply of electricity. As temperatures rose last summer, it had to resort to infrequent planned power outages.
Kuwait’s electricity crisis has long been predicted by experts, who point to the country’s indecisiveness over building new power plants to meet growing demand. The nation’s power infrastructure is also largely antiquated and in need of regular maintenance. The subsidy-driven energy model in Kuwait is another significant obstacle to solving the crisis. Because residents receive heavy government subsidies for electricity, there is little financial incentive for consumers to cut back on their use, which results in high consumption.
Kuwait’s goal is to have 15% of its electricity come from renewable sources by 2030.
KAPP and the Acwa Power-led consortium will form a project company, with KAPP keeping 60% of the company’s share capital and the consortium owning 40%, the statement said.
KAPP will then allocate 50 per cent of the company’s capital for public subscription by Kuwaiti citizens after the project becomes fully operational by 2029 and is listed on the Kuwait Stock Exchange, the statement said.
The Gulf Co-operation Council’s six member states each own an equal share of Kuwait-based GIC. It has extensive experience in the Gulf’s water and power industries and has developed and owned ten infrastructure projects in the area.
“GIC is committed to ensuring the provision of sustainable electricity and water resources at competitive economic costs to support Kuwait’s social and economic prosperity,” Ibrahim Al-Qadhi, chief executive of GIC, said.
Acwa Power, backed by Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, is one of the largest renewable energy developers in the Middle East. It currently has operations in 15 countries across the Middle East, Africa, and Central and South-east Asia.
With a total portfolio size of roughly $117 billion, it invests in and manages 109 power generation and water desalination projects that are currently under construction, operation, and advanced development.
Source : the national news
