Lone bid for Al-Zour North IWPP not unexpected
3 January 2025
Commentary
Jennifer Aguinaldo
Energy & technology editor
Kuwait received a single bid for the contract to develop its second independent water and power project (IWPP), eight months after it issued the final tender for the contract, and six years after it announced its intention to procure the plant.
The lone bidder for the contract to develop the Al-Zour North 2 & 3 IWPP comprises a team of Saudi utility developer Acwa Power and the local Gulf Investment Corporation (GIC).
The planned integrated facility will have a power generation capacity of 2,700MW and a desalination capacity of 120 million imperial gallons a day.
The project struggled to take off partly due to stakeholder indecision, with the government undergoing a series of changes and transitions over the past few years.
For the most part, these factors have dampened investor appetite for the project.
But there is another important issue underpinning the hesitation to bid for the contract. The long-term power and water purchase agreement between the winning bidder and offtaker will likely go beyond 2050 – when most international developers expect to reach carbon neutrality – especially if the award of the contract, financial close and start of construction encounter further delays.
At this point, it is unclear if the Ministry of Electricity, Water & Renewable Energy will retender the contract or proceed to evaluate and award the contract to the Acwa Power-GIC team.
What is certain, as one senior industry source points out, is that the project’s succeeding phase is unlikely to be smooth sailing.
MEED understands that after a single bid, the procuring entity, the Kuwait Authority for Partnership Projects (Kapp), will need to obtain approval from the Kapp Higher Committee to move forward.
From there, it will also need to ensure that the bid complies with the provisions of the request for proposals.
The approving agencies will have to weigh the urgency of augmenting and improving the state’s power generation capacity to quell power outages during the summer period, as well as the pros and cons of awarding a contract to the lone bidder.
They can look to their GCC neighbour, Qatar, which, after several delays, awarded the Facility E IWPP contract to a sole bidder in November.
For the Acwa Power and GIC team, it is all to play for at this stage.
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