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The Kuwait Investment Authority (KIA) has a new proposal on how to advance with developing the third and fourth phases of the Shagaya solar plant, Kuwaiti news outlet Al Qabas reports, citing a report by the authority it has seen. The proposal also includes plans for Al Abdaliya solar farm. The projects were estimated to have a total value of around USD 800 mn.
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China plays a large role: The report proposes establishing a JV in which Kuwaiti and Chinese governments retain 42.5% ownership each, with the remaining 15% going to a listed Kuwaiti company. The proposal also suggested that the JV be responsible for the financing, construction, operation, and maintenance of the plants. The projects would secure financing via 20% shares and 80% debt, including potential financing from local and international financial institutions. A long-term power purchase agreement with the government will also be guaranteed for the JV.
REMEMBER- The tender for phase three of Al Shagaya plant launches in August: The Kuwait Authority for Partnership Projects (KAPP) shortlisted several global utility developers for the third phase of Al Shagaya solar project with a total capacity of 1.1 GW. It is unclear whether this new proposal cancels the tender all together. Five consortiums put their names in the hat:
- KSA’s Acwa Power and Kuwait’s Alternative Energy Projects Company;
- A Masdar-led consortium with Kuwait’s Fouad Alghanim & Sons;
- France’s EDF Renewables with Kuwait’s Al Sagar;
- China’s Jinko Power with Japan’s Jera;
- France’s Total Energies Renewables with Vietnam’s Trungnam Group.
Why the new proposal? KIA appears to be exploring the ownership options it views as optimal for the country. According to Al Qabas, the report states that if the government owns over 51% of the projects, laws limiting hiring and operational flexibility would be applied to them. Meanwhile, the public-private partnership laws would limit government ownership to a range of 6% to 24% and require 50% stakes to be offered in an IPO of 50% stakes and a competitive bidding process for the remaining 26%-44%.
REFRESHER- The country has big renewables plans: The Kuwait Foundation for the Advancement of Sciences (KFAS) published a new energy transition roadmap for the country in September. Developed in partnership with Hartree Partners, the Petroleum Corporation, and Kuwait’s Electricity Ministry, the new roadmap aims to generate USD 390 bn in net revenues for the country by 2060.
Projects are already in the works: US-based engineering firm KBR secured an advisory consulting contract with Kuwait Oil Company for the production of 17 GW of renewables and 25 GW of green hydrogen by 2050 in July.
