Hyundai Heavy, Sidem Win $1.4 Billion Kuwait Power and Desal Contract

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Hyundai Heavy Industries (KSX:009540.KS) (Ulsan, South Korea), in a consortium with Sidem (Paris, France), a subsidiary of Veolia Environment Company, has been awarded the contract to build a $1.4 billion power and desalination plant that will be located 100 kilometers north of Kuwait City. This is the first phase of the Al-Zour independent water and power project (IWPP).

The contract was awarded by the engineering, procurement and construction (EPC) consortium, which was formed by GDF Suez (OTC:GDSFZ) (Paris) in 2011 to handle the $2.5 billion overall project. Hyundai and Sidem are members of the consortium.

Japanese banks feature prominently in the funding. A company was established for the project, in which the winning consortium has a stake of 40% and the Kuwait government holds 10%. Citizens will be issued with free shares from a 50% interest in the project.

Hyundai will build a $970 million gas-fired power plant, and Sidem will build the water desalination plant in a combined complex. The power and water produced will be sold to the Ministry of Electricity and Water over a period of 40 years.

Construction on the project will begin this month, and completion is scheduled for the end of 2016. The power plant will have a generating capacity of 1,500 MW, and the desalination plant will produce up to 486,000 cubic meters of potable water per day.

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