A consortium, led by Saudi Arabia’s ACWA Power and Kuwait’s Gulf Investment Corporation (GIC), has won the contract to develop Az-Zour North Phase 2 & 3 Independent Water and Power Project (IWPP) in Southern Kuwait.
The consortium signing the Letter of Agreement with the Kuwait Authority for Partnership Projects Authority (KAPP) and the Ministry of Electricity, Water and Renewable Energy (MEWRE).
The project is set to be the largest integrated power and water plant in Kuwait, with a net power generation capacity of at least 2,700 megawatts and a net desalinated water production capacity of at least 120 million imperial gallons per day (MIGD). The megaproject will be built at a total investment cost exceeding US$4 billion.
ACWA Power leads mega Kuwait project
The Riyadh-headquartered ACWA Power is the world’s largest private water desalination company, and a leader in energy transition and a first mover into green hydrogen.
Under a 25-year offtake agreement, the consortium will design, finance, build, operate, maintain and transfer the plant and its associated facilities under a BOT (Build-Operate-Transfer) model. The consortium and KAPP will establish a project company, where the consortium will hold 40 per cent and KAPP will retain 60 per cent of the company’s share capital.
KAPP will later allocate 50 per cent of the company’s capital for public subscription by Kuwaiti citizens when the project becomes fully operational by 2029. It will be listed on the Kuwait Stock Exchange.
Raad Al Saady, Vice Chairman and Managing Director of ACWA Power, commented: “This landmark agreement for the Az-Zour North Phase 2 & 3 IWPP reflects ACWA Power’s commitment to supporting Kuwait’s ambitious development agenda through a project of strategic national importance.
“We look forward to bringing our experience from a diverse portfolio of projects worldwide and applying our expertise in the Build-Operate-Transfer model in close partnership with our counterparts in Kuwait. Together, we will work to enhance the reliable and sustainable delivery of power and water in Kuwait, further strengthening our shared efforts towards energy transition and water security.”
This project will support Kuwait’s electricity generation and water security infrastructure, while creating employment opportunities for Kuwaitis during both construction and operational phases.
It will be the second phase of the Al-Zour venture that currently produces 2,700 megawatts and desalinates 120 MIGDs. Once the second phase is operational, the output capacity will double.
GIC is considered a pioneer in Public-Private Partnership (PPP) infrastructure projects in the region where it successfully developed and owns 10 infrastructure projects.
Ibrahim Ali Al-Qadhi, CEO of Gulf Investment Corporation, added: “We are proud to contribute to the development of strategic infrastructure projects in Kuwait through Az-Zour North Phase 2 & 3 IWPP. This project represents a landmark investment in the GIC portfolio, utilising the latest technologies and highest global standards in power generation and water desalination.
“GIC is committed to ensuring the provision of sustainable electricity and water resources at competitive economic costs to support Kuwait’s social and economic prosperity.”
In a statement, KAPP said that the venture constitutes a pivotal step as part of the state strategy for meeting mounting needs for water and electricity, back up the national power network and render it ready to cope with future development projects.
It also delivers on the government’s aim to engage the private sector in overhauling the infrastructure, use its expertise in designing, execution and operation, speed up the executions, besides luring foreign investments.
