meed-logo

line1 line2 line3
SIGN IN / REGISTER

Sepco 3 to undertake Al-Zour North 2 & 3 EPC

6 May 2025

 

A utility developer team comprising Saudi Arabia's Acwa Power and the local Gulf Investment Company (GIC) is understood to have partnered with China-headquartered Shandong Tiejun Electric Power Company (Sepco 3) in its bid to develop Kuwait's second independent water and power project (IWPP).

The Al-Zour North 2 & 3 IWPP will have a power generation capacity of 2,700MW and a desalination capacity of 120 million imperial gallons a day (MIGD).

On 5 May, Kuwait's Ministry of Electricity, Water & Renewable Energy (MEWRE), through the Kuwait Authority for Partnership Projects (Kapp), opened the financial envelopes submitted for the contract by the lone bidder, the Acwa Power-GIC team.

The procurement authority said it opened the financial envelopes in the presence of qualified investors that had previously obtained the project's proposal request.

MEED understands that the financial envelopes contain the annual equivalent payment (AEP) value offer and the share price (SHP) offer.

Based on an uploaded picture on the Kapp website, the AEP value is about KD522.38m ($1.7bn).

The signing of the power and water purchase agreement by the Acwa Power team and MEWRE is expected to take place at a later date, an industry source said.

The project company will sign a 25-year energy conversion and water purchase agreement with MEWRE starting from the project’s commercial operation date.

The Al-Zour North 2 & 3 IWPP will use liquefied natural gas and high-pressure natural gas, with gas oil as a backup fuel, and will connect to the national grid via a 400-kilovolt transmission substation.

According to industry sources, Sepco 3 will be undertaking the project's engineering, procurement and construction (EPC) contract.

Unlike in most GCC states, where bidders submit separate levelised electricity and water costs – expressed in $cents a kilowatt-hour and per cubic metre – for IWPP tenders, Kuwait has two bid evaluation parameters.

The AEP value is a combination of average power and water costs within a year, while the SHP, or equivalent share price, is the amount of equity divided by the number of shares.

Separate tariffs for the power and water desalination plants may have been submitted but will not likely be disclosed publicly, one of the sources said.

Located about 100 kilometres south of Kuwait City, the Al-Zour North 2 & 3 IWPP 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.

The project struggled to take off partly due to stakeholder indecision, with the government undergoing several changes and transitions in the past few years.

The plan to develop Kuwait's second IWPP was first announced in 2016-17, following the commissioning of its first IWPP, Al-Zour North 1, in late 2016.

Following a series of delays and scope changes, Kapp finally tendered the contract to develop the Al-Zour North 2 & 3 IWPP in March last year. The tender was issued three years after Kapp had selected a team comprising three UK-headquartered firms – EY, Atkins and Addleshaw Goddard – as transaction advisers for this project, along with another planned IWPP in Al-Khiran, in April 2021.

First IWPP

Kuwait's erstwhile Partnerships Technical Bureau selected the winning consortium of UK/French company GDF Suez, now Engie; Japan's Sumitomo; and Kuwait's AH Sagar & Brothers Group as the preferred bidder for the Al-Zour North 1 IWPP in February 2012.

According to MEED archives, the successful consortium submitted the lowest bid to build the project, with an AEP value of KD127.1m ($453m) at the time.

The project company, Shamal Az-Zour Al-Oula, awarded South Korea’s Hyundai Heavy Industries and France’s Sidem the EPC contract to build the plant.

The combined-cycle power plant produces 1,539.2MW in net contracted power capacity from five General Electric GTG 9F-3 turbines generating 225.8MW each, and two General Electric STG D1 turbines generating 251MW each.

The integrated facility has a multiple-effect distillation unit capable of producing 107 MIGD, the equivalent of 486,400 cubic metres a day of desalinated water.

Public trading of shares

In line with Kuwait's Public-Private Partnership Law, Shamal Az-Zour Al-Oula began trading shares on the Kuwait stock exchange in 2020, after Kapp distributed 50% of its total shares to individual Kuwaiti investors in the last quarter of 2019.

Several public and private entities own the remaining 50% of the company's shares. They are:

  • Azour North One Holding Company, owned by a consortium comprising Engie, Sumitomo Corporation and Abdullah Hama Al-Sagar & Brothers (40%);
  • Kuwait Investment Authority (5%);
  • Public Institution for Social Security (5%).
https://image.digitalinsightresearch.in/uploads/NewsArticle/13820520/main.jpg
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Firms prepare Hudayriat East PPP tunnels advisory bids

    25 June 2026

     

    Abu Dhabi’s Modon Infrastructure, formerly Gridora, has tendered a contract for technical advisory services for the construction of two underwater tunnels connecting the eastern side of Hudayriat Island with mainland Abu Dhabi.

    Consultants have until 26 June to submit their proposals.

    The project includes the construction of a 4.8-kilometre (km) highway, with four lanes in each direction, connecting Hudayriat Island to Mussafah 8th Street.

    The project will be delivered on a public-private partnership (PPP) basis in coordination with the Abu Dhabi Department of Municipalities and Transport and the Abu Dhabi Investment Office.

    The contract term is expected to be 25 years.

    The latest infrastructure development in Abu Dhabi follows Modon Infrastructure’s invitation in May for firms to register for the next phase of Abu Dhabi’s Mid Island Parkway Project (MIPP), which will also be developed on a PPP basis.

    Modon Infrastructure will act as the lead developer, holding the majority equity stake in the project company. It will award the engineering, procurement and construction contract, as well as the operations and maintenance services and advisory appointments.

    The second phase of the MIPP involves the construction of about 11km of highways, including a mix of three-, four- and five-lane sections. The highways will connect the Um-Yifeenah, Al-Jubail, Al-Sammaliyyah and Sas Al-Nakhl islands to Khalifa City and the E10 road.

    The scope also covers the construction of three interchanges: the E20, E10 and Dumbbell interchanges on Al-Sammaliyyah Island.

    The project includes several major structures, such as the E20 interchange, which will feature cast-in-place box-girder and void-slab bridges, and the E10 interchange with cast-in-place box-girder bridges. It also includes I-girder bridges between Raha Beach West and Sas Al-Nakhl Island, as well as a causeway at Sas Al-Nakhl Island.

    Further key elements include a cast-in-place balanced cantilever bridge between Sas Al-Nakhl Island and Al-Sammaliyyah Island; a tunnel between Al-Sammaliyyah Island and Bilrimaid Island; and a cut-and-cover (open) tunnel on Bilrimaid Island. The project will be completed with another tunnel connecting Bilrimaid Island to Um-Yifeenah Island.

    > Be recognised among the best in the industry at the MEED Projects Awards 2026 …

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17410214/main.jpg
    Yasir Iqbal
  • Algeria tenders upstream oil project contract

    25 June 2026

    Algeria’s state-owned national oil and gas company, Sonatrach, has tendered a contract for the development and rehabilitation of the central processing facility (CPF) at the Bir Berkine oil and gas field.

    The scope of the contract includes the study, supply, construction and commissioning of a project to rehabilitate the CPF facilities at the field, which is located in the Hassi Mesaoud region.

    Sonatrach says in the tender documents that the objective of the project is to ensure the continuity of production activities “under stable and secure operating conditions”.

    It also says the project aims to improve production yields and quality.

    The contract includes both initial and detailed studies as well as the supply of all equipment and materials.

    It also includes the execution of works, the assembly of all equipment and materials, and the commissioning of all relevant facilities.

    The tender has a two-stage submission process, with the first stage requiring technical bids to be submitted by 23 August.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17423013/main3916.jpg
    Wil Crisp
  • Red Sea Global tenders King Salman Bay construction work

    25 June 2026

     

    Saudi gigaproject developer Red Sea Global (RSG) has tendered a contract inviting firms to undertake marine infrastructure works at King Salman Bay on the Red Sea coast, north of Jeddah.

    The scope includes dredging and earthworks, as well as quay wall and edge protection works spanning about 11 kilometres.

    The bid submission deadline is 31 July.

    King Salman Bay is expected to be a waterfront development aimed at reshaping the city’s northern Red Sea frontage into a mixed-use destination, anchored by public-realm improvements and leisure-led development.

    The update follows RSG’s award of an estimated SR100m ($27m) contract to construct a solid waste management centre at its Red Sea Project. The scope includes four buildings: a material recycling facility, a transfer station, an administration building and a vehicle maintenance building.

    In October last year, MEED reported that RSG had secured a SR6.5bn ($1.7bn) credit facility to further develop Amaala, its luxury tourism destination on Saudi Arabia’s northwestern Red Sea coast.

    According to an official statement, “The funding is led by Riyad Bank as the sole underwriter, along with Saudi Investment Bank and Bank Al-Bilad as mandated lead arrangers.

    “The loan arrangement comprises a mix of conventional and Islamic financing and adheres to RSG’s Green Loan Framework, which was first established when it secured private funding from a consortium of four banks for the Red Sea destination in 2021,” the statement added.

    The announcement followed RSG’s opening of its first properties for sale at Amaala, including branded residential communities and a five-bedroom villa on a private island.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17430045/main.jpg
    Yasir Iqbal
  • MECC submits lowest bid on three Kuwaiti oil and gas contracts

    25 June 2026

     

    Kuwait-based Mechanical Engineering & Contracting Company (MECC) has submitted the lowest bid across three separate contracts tendered by the state-owned upstream operator Kuwait Oil Company (KOC).

    The total value of the low bids is $427m, and all of the contracts are focused on developing substations to power industrial lift pumps and remote header manifolds

    Five companies submitted bids for a contract to develop several substations to power industrial lift pumps and remote header manifolds in areas 6, 10 and 12 in southern and eastern Kuwait.

    The bidders were:

    • MECC: KD65,760,000 ($212m)
    • Heavy Engineering Industries & Shipbuilding Company: KD70,630,000 ($228m)
    • Amco Engineering & Construction: KD73,446,100 ($237m)
    • Combined Group Contracting Company: KD76,186,000 ($246m)
    • Nasser Mohammed Al-Badah & Partner General Trading & Contracting: KD79,332,417 ($256m)

    Six companies submitted bids for a contract to develop several substations to power industrial lift pumps and remote header manifolds in areas 8 and 13 in southern and eastern Kuwait.

    The bidders were:

    • MECC: KD30,760,000 ($99m)
    • Badr Al-Mulla & Brothers: KD32,662,040 ($106m)
    • Heavy Engineering Industries & Shipbuilding Company: KD34,139,000 ($110m)
    • Industrial Company for Electrical Projects: KD36,375,520 ($118m)
    • Nasser Mohammed Al-Badah & Partner General Trading & Contracting: KD37,278,526 ($120m)
    • Combined Group Contracting Company: KD37,790,000 ($122m)

    Eight companies submitted bids for a contract focused on developing several substations to power industrial lift pumps and remote header manifolds in areas 7, 9, and 11 in southern and eastern Kuwait.

    The bidders were:

    • MECC: KD35,760,000 ($116m)
    • Badr Al-Mulla & Brothers: KD39,447,165 ($127m)
    • Amco Engineering & Construction: KD39,736,800 ($128m)
    • Heavy Engineering Industries & Shipbuilding Company: KD40,105,000 ($130m)
    • Industrial Company for Electrical Projects: KD43,238,265 ($140m)
    • Engineering Company for Petroleum & Chemical Industries (Enppi): KD43,514,805 ($141m)
    • Combined Group Contracting Company: KD43,650,000 ($141m)
    • Nasser Mohammed Al-Badah & Partner General Trading & Contracting: KD43,706,826 ($141m)

    Kuwait’s oil and gas sector has been in crisis in recent months due to disruption from the regional conflict that started after the US and Israel attacked Iran on 28 February 2026.

    A preliminary peace agreement between the US and Iran, which was announced on 14 June, has increased optimism that disruption to the sector will decrease in the coming weeks.

    Under the terms of the agreement, both sides have stated that the free flow of vessels will be permitted through the Strait of Hormuz, through which nearly all of Kuwait’s crude oil is normally exported.

    READ THE JUNE 2026 MEED BUSINESS REVIEW – click here to view PDF

    GCC looks beyond the Strait; Iraq’s reform window narrows as fiscal assumptions shatter; MEED Top 100 companies.

    Distributed to senior decision-makers in the region and around the world, the June 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17423009/main.jpg
    Wil Crisp
  • Chinese firm wins $265m Saudi hospital contract

    24 June 2026

    Zhejiang Construction International, the local subsidiary of Chinese contractor Zhejiang Construction Investment Group, has won a $265m contract to build the Prince Mohammed Bin Fahd University Speciality Hospital in Al-Khobar.

    Construction is expected to take three years from the start date.

    Prince Mohammed Bin Fahd University awarded the contract.

    Located in Al-Raja district, Al-Khobar, in Saudi Arabia’s Eastern Province, the hospital project will cover about 60,000 square metres.

    The contract covers the construction of a 10-storey hospital building, two five-storey auxiliary buildings connected by corridors and a basement.

    Work will include civil works, mechanical and electrical installation, curtain walling, landscaping, detailed design and the procurement of medical equipment.

    The award is the latest in a series of contracts secured by Chinese contractors from Saudi entities in recent months.

    Last week, MEED reported that Saudi Arabia’s Ministry of Municipalities & Housing awarded contracts worth more than SR1.9bn ($506m) to Chinese contractors for two residential developments in the kingdom.

    China Architectural Construction Corporation won the first contract, valued at SR875m ($233m), to build 2,010 housing units at the Al-Ruba residential project in Riyadh.

    China State Construction Engineering Corporation secured the other contract, valued at more than SR1bn ($266m), for the Al-Rasha Al-Faisaliah residential project in Dammam, comprising 2,426 housing units.

    GlobalData expects Saudi Arabia’s construction industry to record average annual growth of 5.2% in 2025-28, supported by investments in transport, electricity, housing and tourism infrastructure, as well as the $850bn-plus gigaprojects programme.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17412846/main.jpg
    Yasir Iqbal