Kuwait sets new bid deadline for power plant privatisation role

Kuwait sets new bid deadline for power plant privatisation role

7 Oct 2021

Kuwait’s government has extended the bid submission date to 23 November for the transaction advisory (TA) role on the planned privatisation of the North Shuaiba power and water plant

Kuwait’s government has extended the bid submission date to 23 November for the transaction advisory (TA) role on the planned privatisation of the North Shuaiba power and water plant, the first existing utilities asset earmarked to be sold off to the private sector in Kuwait.

Energy & Utilities reported in August that Kuwait had retendered the TA contract on the North Shuaiba privatisation, a project which was first revealed in 2017. The deadline for advisory firms to submit proposals was extended to the new November deadline from the previous 26 September submission date.

The project is being overseen by the Supreme Council for Privatisation (SCP).

Tender documents for advisory roles for the North Shuaiba power and water plant were first issued in June 2020, with bids submitted for the financial advisory contract in December 2020. The scope for the North Shuaiba privatisation has not changed for the latest tender, according to sources with knowledge of the project. The North Shuaiba plant is estimated to have a value of about $1.2bn.

The North Shuaiba Power Plant is currently being operated by a private company under an operation and maintenance (O&M) agreement, which is due to expire in mid-2020.

The North Shuaiba Power Plant is a dual-fuel combined-cycle plant with a power capacity of 778MW, and also contains a multi-stage flash (MSF) desalination plant with a capacity of 45 million imperial gallons a day (MIGD).

The plant primarily operates on gas, with liquid oil as back-up when gas is not available.

The privatisation of NSPP will be delivered in three phases:

Phase 1 – Company incorporation and valuation

Under the first phase, a Kuwaiti shareholding company will be established into which assets of the NSPP will be transferred into.

Following the completion of the first phase, the shareholding company and its assets will be valued.

Phase 2 – Tendering stage

The shares in the shareholding company will be tendered to investors in accordance with Kuwait’s Privatisation Law. The second stage will include carrying out rehabilitation works on the project to improve the operation of the plant.

Phase 3 – share transfer to employees and Kuwaiti public

In line with the Privatisation Law, shares will be distributed to employees and the Kuwaiti public

The SCP has been mandated by the Kuwaiti government to privatise public projects and assets which are suitable for privatisation. The Technical Bureau for Privatisation (TBP), established in 2015, is the technical arm of SCP, and the appointed adviser will be working under the ‘Joint Committee for the Privatisation of NSPP.’

Kuwait’s SCP first initiated plans to privatise existing state-owned power assets in 2017, when it received proposals from financial, legal and technical consultants to assist with plans to privatise utilities assets. However, after receiving proposals in May 2017, the scheme was put on hold.

 

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