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• 
  Kuwait resets IWPP bid deadline to December

  20 September 2024

  

   

  Kuwait’s Ministry of Electricity, Water & Renewable Energy (MEWRE), through the Kuwait Authority for Partnership Projects (Kapp), has given prequalified bidders another three-month extension to submit their proposals for a contract to develop and operate the country's next independent water and power producer (IWPP) project.

  The new tender closing date has been extended to 30 December from a previous 30 September deadline, according to a source close to the project.

  The Al-Zour North 2 and 3 IWPP will merge the previously planned second and third phases. It will have a generation capacity of 2,700MW and a desalination capacity of 120 million imperial gallons a day (MIGD).

  Located about 100 kilometres south of Kuwait City, the project will be adjacent to the western border of the first Al-Zour North facility for electric power generation and water desalination, which is currently in operation, and on the northern border of the Al-Zour South station.

  Kapp received statements of qualification last year from utility developers for the contracts to develop the Al-Zour North 2 and 3 and Al-Khiran 1 IWPP projects.

  It now plans to procure the Al-Zour North 2 and 3 and Al-Khiran 1 projects as two separate IWPP contracts.

  Industry sources said companies that have been qualified to bid for the contracts include:

  • Abu Dhabi National Energy (Taqa) / AH Al-Sager & Brothers Company (local) / Jera (Japan)
  • Acwa Power (local) / Gulf Investment Corporation (Kuwait) 
  • China Power International Holding (China) / Malakoff International (Malaysia) / Abdulaziz Al-Ajlan & Sons (Saudi Arabia)
  • Nebras Power (Qatar)
  • Sumitomo Corporation (Japan)

  Separate contracts

  The contract to develop the Al-Zour North 2 and 3 IWPP scheme was tendered on 31 March and a pre-bid conference was conducted in May.

  The Al-Khiran 1 IWPP will have a power generation capacity of 1,800MW and a desalination capacity of 33 MIGD.

  Both projects will export their production to the electricity grid and water transmission grid through an energy transfer and water purchase contract agreement with MEWRE for 25 years from the date of operation of the station.

  Both plants are expected to run on a mixture of liquefied natural gas and high-pressure natural gas, with gas oil as a reserve fuel. 

  MEED understands that the selected developer or developers will have the option to use thermal or reverse osmosis technology for the water desalination facility.   

  A team comprising UK-headquartered firms EY, Atkins and Addleshaw Goddard won the transaction advisory contract for the two IWPPs in April 2021, two months after Kapp obtained approval from the State Audit Bureau to award the contract.

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  Jennifer Aguinaldo
• 
  Construction to start on $1.9bn Saudi data centres

  20 September 2024

  Riyadh-headquartered data centre developer ICS Arabia has broken ground on the first phase of an 187MW data centre project in Saudi Arabia.

  ICS Arabia is developing the project, called Desert Dragon Data Centres, in a joint venture with Shanghai-based Lumaotong Group and China Mobile International.

  The first Tier 3, 65MW data centre facility is expected to be launched in Riyadh and become operational in March 2026.

  The second phase, a 50MW data centre, will start construction in Jeddah in February 2025 for operations in the fourth quarter of 2026.

  The project’s third phase will encompass a 72MW facility, commencing construction in September 2025 in the Dammam and Neom regions.

  Over this period, the joint venture plans to invest a total of $1.9bn.

  The company, which specialises in the design, build and operation of data centres, said it has completed the design for the cluster of 187MW, Tier 3 and 4 data centres and secured land through the Saudi Authority for Industrial Cities & Technology Zones (Modon).

  According to ICS Arabia, the rack capacity of the planned data centres ranges from 2 kilowatts (kW) to 100kW for conventional racks and immersive cooling technologies.

  The firm said that the Desert Dragon Data Centres will be “available to global customers, [offering services] from cloud hosting to artificial intelligence”.

  Related read: Riyadh AI goals require collosal mindset and capital shift

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  Jennifer Aguinaldo
• 
  Water developers adopt selective stance

  19 September 2024

  

   

  UAE-based utility Sharjah Electricity & Water Authority (Sewa) and Saudi water offtaker Saudi Water Partnership Company (SWPC) each received a single bid for their recently tendered independent water producer (IWP) projects.

  An all-local team comprising Acwa Power, Haji Abdullah Alireza & Company (Haaco) and AlSharif Contracting & Commercial Development submitted the sole proposal for the contract to develop the Jubail 4 and 6 IWP schemes in Saudi Arabia.

  This is a far cry from the four bids SWPC received in 2020 for a contract to develop and operate the Jubail 3B IWP.

  However, the fact that SWPC received only two bids for the contract to develop the smaller Ras Mohaisen IWP in April this year indicates that utility or water developers and investors have increasingly adopted a more selective stance when it comes to bidding for new projects.  

  "Combined, Jubail 4 and 6 is a large project and most developers are tied up with other ones, as there are many IWPs under way at the moment, not only in Saudi Arabia but throughout the GCC," says Robert Bryniak, CEO at Dubai-based Golden Sands Management (Marketing) Consulting.

  The Jubail 4 and 6 seawater reverse osmosis (SWRO) plants will have a total combined capacity of 600,000 cubic metres a day (cm/d) and will be developed under one contract.

  In comparison, the Ras Mohaisen IWP has a capacity of 300,000 cm/d, while Sewa's Hamriyah IWP will have a capacity of 410,000 cm/d. 

  Bryniak says that many developers are at, or near, their capacity and this makes it difficult to make short-term commitments without paying significantly more for skilled workers and key equipment component parts. 

  "Developers may be shying away from some of the larger projects because of this, especially knowing that tariffs need to be competitive to win.

  "Developers have to spend significant amounts just to bid on a project and, if unsuccessful, this sunk cost needs to be eventually recouped on future projects. And I think this is resulting in developers being more selective in terms of the projects they go after, focusing more on those where they believe they have a good chance of winning."

  The case is slightly different for the Hamriyah IWP, which is Sharjah's first major SWRO project to be procured on a public-private partnership (PPP) basis.

  Acwa Power submitted the sole proposal for the contract to develop the project in December last year.

  "This is Sharjah’s first IWP and, unlike other jurisdictions such as Oman, Abu Dhabi and Saudi Arabia, the emirate has yet to establish a track record with PPPs, especially in power and water," explains Bryniak

  Given several false starts and issues with past PPPs, it is likely that developers will shy away and focus their efforts on more established – and financially stronger – offtakers elsewhere in the region.

  Known for its strong risk appetite, Acwa Power signed the water procurement agreement with Sewa earlier in September and a team of France's Sidem and its parent company Veolia has been selected as the project's engineering, procurement and construction contractor.

  This means discussions with banks and financial institutions could be nearing their conclusion, leading to the start of the project's construction. 

  Once the Hamriyah IWP reaches financial close and commercial operations, Bryniak says Sewa should be able to attract more developers for future IWPs. 

  Going forward, procurers could also consider adopting new or additional measures to attract more developers to their future IWP projects and avoid incurring higher tariffs.

  A UAE-based executive with an international developer says that in some cases the quality of the request for proposals (RFPs) being issued can be improved.

  MEED understands some of the recent RFPs lack comprehensive information or details, which leads contractors to add higher contingency costs to cover risks. 

  Bryniak concurs, adding that going forward, procurers throughout the GCC will need to spend more time and effort marketing and promoting their IWPs, and will need to be more selective in terms of timing, in order to optimise competition.

  "They may also need to consider modifying their procurement processes to attract more bidders. Otherwise, they might continue to realise only one or just a few bidders, with likely higher tariffs in the near term."

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  Jennifer Aguinaldo
• 
  Abu Dhabi and US firms form $100bn tech investment vehicle

  19 September 2024

  Abu Dhabi-based artificial intelligence (AI)-focused investment company MGX has partnered with US-headquartered BlackRock, Global Infrastructure Partners (GIP) and Microsoft to establish the Global AI Infrastructure Investment Partnership (GAIIP).

  The vehicle will "make investments in new and expanded data centres to meet growing demand for computing power, as well as energy infrastructure to create new sources of power for these facilities", Blackrock said on 18 September.

  The partnership will initially seek to unlock $30bn of private equity capital from investors, asset owners and corporates, which in turn will mobilise a total investment potential of up to $100bn when including debt financing.

  According to BlackRock, these infrastructure investments "will be chiefly in the US, fueling AI innovation and economic growth, and the remainder will be invested in US partner countries".

  It added: "This partnership will support an open architecture and broad ecosystem, providing full access on a non-exclusive basis for a diverse range of partners and companies.

  Leading graphics processing unit manufacturer Nvidia, also US-based, will support GAIIP by offering its expertise in AI data centres and AI factories, to benefit the AI ecosystem.

  "GAIIP will also actively engage with industry leaders to help enhance AI supply chains and energy sourcing for the benefit of its customers and the industry," the statement added.

  The founders of the partnership bring together leading global investors BlackRock, GIP and MGX with funding as well as expertise from Microsoft.

  Through its partners, GAIIP combines an understanding of infrastructure and technology to drive efficient scaling of data centres with energy, power and decarbonisation investment capabilities for related enabling infrastructure for AI.

  Commenting on the deal, MGX chairman Sheikh Tahnoon Bin Zayed Al-Nahyan said that AI "is not just an industry of the future, it underpins the future".

  He said: "Through this unique partnership, we will enable faster innovation, technological breakthroughs and transformational productivity gains across the global economy."

  “Mobilising private capital to build AI infrastructure like data centres and power will unlock a multitrillion-dollar long-term investment opportunity,” said Larry Fink, BlackRock chairman and CEO. “Data centres are the bedrock of the digital economy, and these investments will help power economic growth, create jobs and drive AI technology innovation.”

  Related read: Region plays high-stakes AI game

  Photo credit: Pixabay

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  Jennifer Aguinaldo
• 
  Tabreed eyes geothermal cooling for data centres

  18 September 2024

  

   

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  Following the successful implementation of a geothermal cooling plant proof of concept in Masdar City in Abu Dhabi, the National Central Cooling Company (Tabreed) is considering potential pilot projects for geothermal cooling plants for data centres.

  "Heat from geothermal wells, along with the heat produced by the data centre facility, can be captured and used to supply power for cooling the data centre," Khalid Marzooqi, Tabreed chief executive, told MEED on the sidelines of the ongoing World Utilities Congress in Abu Dhabi. 

  Marzooqi said Tabreed is talking to several data centre service providers and soliciting proposals for a potential pilot project.

  "Sustainability is a big ticket item for data centres," said Marzooqi, adding that a remotely located, off-grid data centre could be an ideal first project, where geothermal wells can be drilled within five to 10 metres of the facility to supply power to a captive power or cooling plant.

  Tabreed and Abu Dhabi National Oil Company (Adnoc) announced the start of operations in December 2023 at G2Cool, a district cooling project harnessing geothermal energy. The geothermal cooling plant provides 10% of Masdar City's requirements.

  The two geothermal wells have temperatures exceeding 90 degrees centigrade and flow rates of approximately 100 litres a second.

  The doublet provides hot water that is fed into absorption cooling technology to produce chilled water, which is then utilised for Tabreed’s district cooling activities.

  The two geothermal wells being utilised for the project were drilled in 2009-10 under a project carried out with Iceland's Reykjavik Geothermal.

  "Advancements in geothermal and district cooling technologies, as well as development at Masdar City, compelled the partners to revisit the project," Tabreed and Adnoc, which is financing the project, said in December.

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  Jennifer Aguinaldo