OREANDA-NEWS. GDF SUEZ is pleased to announce, together with its consortium partners, that financial close has been achieved for the Az Zour North Independent Water & Power Project (IWPP) in Kuwait, the country’s first Private Public Partnership project. The consortium, which owns 40% of the project and comprises GDF SUEZ (17.5%), Sumitomo (17.5%) and A.H. Al Sagar & Brothers (5%), was selected as successful bidder by Kuwait’s Partnerships Technical Bureau (PTB) in January 2013. The remaining 60% is owned by Kuwaiti Government entities.

The consortium will construct a gas-fired combined cycle power plant of 1,500 MW and an associated water desalination plant with a capacity of 107 MIGD (486 thousand m-/day). All of the plant’s output will be purchased by the Kuwait Ministry of Electricity and Water under a 40-year long-term Energy Conversion and Water Purchase Agreement (ECWPA). The plant is expected to start commercial operation in the fourth quarter of 2016.

Gerard Mestrallet, Chairman and CEO of GDF SUEZ, said: “We are delighted to have reached financial close on this project, which is a pioneering IWPP in Kuwait. This is an important achievement as it marks our entry into the Kuwait market and it demonstrates GDF SUEZ’s ability to develop and invest in major projects in the Middle East. Az Zour North will further strengthen our presence in the region, which continues to experience high demand for energy and offers opportunities for further growth.”

The total project cost of USD1.8 billion will be funded by a mix of project finance debt and equity in an approximate 80:20 ratio.

In addition, GDF SUEZ and Sumitomo will undertake the operation & maintenance (O&M) for the Az Zour North plant on a 50:50 basis. The EPC contractors will be Hyundai Heavy Industries and SIDEM.

Kuwait plans to nearly double its generation capacity by 2017 in an effort to meet an anticipated peak demand of 25 GW by 2025. The capacity of Az Zour North will account for around 10% of Kuwait’s installed power generation capacity and around 20% of its installed desalination capacity.