Kuwait to sell 50pc stake in major utility project

26/12/2016 07:40 AST

Kuwait's government plans to sell 50 per cent shares in its Az-Zour North One Independent Water & Power Project (IWPP) to the public by the middle of next year, reported the state news agency Kuna.

The $1.7-billion Az-Zour North One project located about 100 km south of capital Kuwait City, began full commercial operations last month and is now gearing up for its debut public issue, it stated.

The gas-fired combined cycle power and desalination plant has a 1,500 MW capacity. It is 40 per cent owned by three partners: France's Engie , Japan's Sumitomo Corporation and Kuwaiti firm AH Al Sagar & Brothers, while the rest of the stake is with Kuwait's sovereign wealth fund KIA, the Public Institution for Social Security, and the PPP body Kuwait Authority for Partnership Projects (KAPP), said the state new agency.

Built on the public-private partnership (PPP) model, the Az-Zour North One boasts a daily capacity of about 480,000 tonnes, accounting for 12 per cent of the installed generation capacity and about 23 per cent of the installed desalination capacity in Kuwait.

A long-term 40-year Energy Conversion and Water Purchase Agreement was sealed in 2013 by the government with the partners and the plant was completed on schedule in under three years from the start of construction on November 26, said the Kuna report.

Under this, all of the power and water generated through the project will be supplied to the Ministry of Electricity and Water of Kuwait.

As per the deal, the government is mandated to sell 50 per cent of its ownership to Kuwaiti citizens, through an IPO. However, it will retain 10 per cent stake following the IPO, the report added.

Trade Arabia