Operations begin at Azzour electricity and water plant
First independently-owned project to sell output to MEW
The first independently-owned power and water plant in Kuwait, Azzour North One, launched commercial operations yesterday. Azzour North One will generate 10 percent of Kuwait’s power requirements (1,539 MW) and 20 percent of water needs (107 million gallons per day). The KD 519 million ($1.7 billion) project was delayed for years due to political infighting but finally started construction in Dec 2013.
The power and water plant marks the first stage in a lengthy effort by the government to meet the state’s growing power and water needs. It also represents the first successful test case for the implementation of the government’s mega infrastructure development plan and the public-private partnership model. Azzour North One will be fueled by a blend of local gas and imported LNG. In 2015, Kuwait imported 3.1 million metric tons of LNG and has awarded a consortium to build a KD 882 million ($2.9 billion) LNG import and regasification terminal at Azzour.
Falling under the first phase of the Independent Water and Power Project (IWPP), Azzour North One is owned and operated by Shamal Azzour Al-Oula KSC, which is 40 percent owned by a private consortium comprising ENGIE (formerly GDF SUEZ), Sumitomo Corporation, and Kuwait-based AH Al Sagar & Brothers. The remaining 60 percent is owned by the government of Kuwait, through the Kuwait Investment Authority (5 percent), the Public Institution for Social Security (5 percent), and Kuwait Authority for Partnership Projects (50 percent).
The government is mandated to sell 50 percent of the total ownership through an initial public offering (IPO) to Kuwaiti citizens after construction is completed. The government will retain a 10 percent stake following the IPO. All the power and treated water produced from the plant will be bought by the Ministry of Electricity and Water (MEW) under a 40-year long-term deal.
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