GDF Suez Consortium Preferred Bidder for Kuwait's Power and Desalination Project

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Written by Richard Finlayson, Senior International Editor for Industrial Info resources (Sugar Land, Texas)--Kuwait's Partnerships Technical Bureau (PTB) has notified a consortium led by GDF Suez (OTC:GDFZY) (Paris, France) that it is the preferred bidder for the construction and operation of the Az Zour North Independent Water and Power project. The consortium includes International Power (OTC:IPRPY) (London, England), which is 70% owned by GDF Suez.

The consortium will begin the construction of the gas-fired, combined-cycle power plant, which will have a generating capacity of at least 1,500 MW and an associated water desalination plant with a capacity 102 million to 107 million imperial gallons a day (464,000 to 486,000 cubic meters a day).

The plant's total output will be purchased by Kuwait's Ministry of Electricity and Water, under a 40-year energy conversion and water purchase agreement. Commercial operations at the plant are scheduled to begin in 2015.

The proposed ownership stakes in the project are Kuwaiti public entities 10%); Kuwaiti nationals via an initial public offering (50%); and the consortium which is made up of International Power and Sumitomo (Tokyo, Japan), (17.5% each), and A.H. Al Sagar & Brothers (Kuwait) (5%). The project will be funded by a mix of project finance debt and equity in an approximate 80:20 ratio.

International Power and Sumitomo anticipate establishing the operation and maintenance company for the Az Zour plant on a 50:50 basis.

International Power has a direct equity interest in more than 25,000 MW of power capacity and nearly 4.8 million cubic meters a day of desalination capacity in operation or under construction. The company is the leading independent power operator and desalinated water producer.

In 2010, peak demand for electricity in Kuwait was about 10,500 MW. Demand growth of 3% to 4% is expected over the next five years.

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