Strong reception for first Kuwait PPP project to be listed

About 50 per cent of Shamal Azzour Al Oula shares have been offered from October 1 to November 29

The Kuwait Authority for Partnership Projects’ public offering of its stake in Shamal Azzour Al Oula, the operator of Az Zour North One power and water plant, generated strong investor interest with 127,000 Kuwaitis signing up.

The offering is the first public-private partnership project to come to market in Kuwait. Under rules governing these schemes, shares in the companies that own projects need to be offered to the public. About 50 per cent of Shamal Azzour Al Oula shares have been offered from October 1 to November 29, Kapp said.

“The public offering is mandated by the IWPP [independent water and power producers] and PPP [public private partnership] laws, which form an integral part of an overarching government effort to include citizens in the ownership of mega-projects that are offered to private sector institutional investors,” Kapp said.

“In addition to providing attractive investment opportunities to citizens, PPP projects empower the private sector to take the lead in growing the national non-oil economy.”

The remaining 50 per cent of the shares continue to be owned by its current shareholders: 40 per cent held by Azour North One Holding Company, comprising a consortium of investors including Engie, Sumitomo Corporation and AH Al Sagar & Brothers; 5 per cent by Kuwait Investment Authority; and 5 per cent by the Public Institution for Social Security.

Power and water produced by the company is supplied entirely to the national power and water grid operated by the Kuwait Ministry of Electricity and Water under a 40-year long-term

Energy Conversion and Water Purchase Agreement. Az Zour North One power and water plant commenced commercial operations in November 2016 and supplies about 10 per cent of Kuwait’s installed power generation capacity and about 20 per cent of its installed water desalination capacity.

Advisers for Kapp’s IPO were Watani Investments Company (NBK Capital) as lead adviser, Kuwait Clearing Company as technical adviser and International Counsel Bureau as the legal adviser.