POWER AND WATERlp.plexusnetwork.com/rs/407-IXB-529/images/MEED-Q1-Power... · 2016. 8. 3. · first PV projects, and prepares to award contracts for an 850MW wind power scheme. Dubai

POWER AND WATER

Q1 2016

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MEED Business Review / 83

The mood at the World Fu-ture Energy Summit in Abu Dhabi from 18-21 January was noticeably more posi-tive than at last year’s event.

In the past 12 months, plans for large-scale renewable programmes have finally been converted into action.

According to MEED’s latest analy-sis of the region’s power market, the value of contract awards for renew-able energy projects rose to $7.7bn in 2015, a major increase of 450 per cent on the previous calendar year.

The main reason for the rapid rise of renewables is economics. The tariff price selected in early 2015 for Du-bai’s 200MW photovoltaic (PV) solar independent power project (IPP) was so low that Dubai has now increased its renewable target for 2030 from

5 to 25 per cent. The falling cost of renewable energy, particularly PV solar, has encouraged other countries in the region to prioritise renewable projects and increase their targets.

Morocco and Jordan both made good progress with major renewable projects in 2015, and Egypt and Abu Dhabi are set to move forward with significant projects in the coming year.

One of the most exciting develop-ments in 2016 is the start of the ten-dering process for the first renewable IPP projects in Saudi Arabia. While the planned projects are comparative-ly small, the news that Saudi Arabia is finally starting to move on renewables will be greatly received by those in the regional and international power and project finance sectors. Andrew Roscoe

Power & waTerIf Riyadh is able to successfully push ahead with clean energy projects, the Middle East and North Africa could become the most lucrative renewable energy market in the world

renewables go mainstream

Business Outlook

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84 \ MEED Business Review

Business Outlook

Three teams prepare to bid for Al-Zour North 2 scheme

Rabat invites fi rms for solar project

Kuwait Authority for Partnership Projects recently extended bid submission deadline to 16 February

Three prequalifi ed groups are preparing to bid on the Al-Zour North 2 independent water and power project (IWPP) in Kuwait.

MEED reported in August that seven groups had been chosen to participate in the tender for the IWPP, which will have a power generation capacity of 1,500MW and a desalination component of 102 million imperial gallons a day.

Teams formedWith Japan’s Mitsui joining up with Saudi Arabia’s Acwa Power, it means four of the seven prequalifi ed compa-nies will bid in three consortiums.

Kuwait’s public-private partnership (PPP) body, Kuwait Authority for Partnership Projects (KAPP), recently

Andrew Roscoe

The Moroccan Solar Agency (Masen) has invited companies to submit ex-pressions of interest (EOIs) for the fi rst phase of the Noor Midelt solar project.

Hybrid mixThe scheme is planned to use a hybrid mix of photovoltaic and concentrated solar power technologies.

The work will involve the construc-tion of one or more solar plants with an installed capacity of 400MW. Masen is seeking to implement the hybrid technologies and storage to increase the availability of electricity in the evening.

extended the bid submission deadline by a month to 16 February.

Potential biddersThe groups expected to submit bids are led by the following companies:� Acwa Power (Saudi Arabia)/Mitsui (Japan);� Marubeni (Japan)/Nebras Power (Qatar);� Sumitomo (Japan).

As with the fi rst Al-Zour North IWPP, the phase 2 project will use natural gas as the main feedstock and gasoil, which will be provided by the Ministry of Electricity & Water.

The scheme has fallen behind sched-ule, with developers invited to submit expressions of interest in June 2013.Andrew Roscoe

MEED’s Power & Water Editor and has extensive experience covering utili-ty projects in the GCC

The project owner has set a deadline of 1 February for the EOIs.

Noor Midelt will be developed as an independent power project (IPP). The framework will include plant design, fi nancing, construction, and operation and maintenance.

Each plant will be built, owned, oper-ated and transferred under a long-term power purchase agreement, which will be entered into between Masen and the project company. Masen will provide the site infrastructure, including roads, water and power.Andrew Roscoe

KUWAIT

MOROCCO

PLANNED INSTALLED CAPACITY BY 2020% of future capacity

Source: Masen

Renewables 42

Coal 26

Oil and gas 25

Others 7



Renewables up 450 per centRegional market is set for further growth in 2016 as renewables contract awards increase

The value of contract awards for renewable energy generation projects in the Middle East and North Africa rose to $7.7bn in 2015, up 450 per cent on the

$1.4bn worth of deals awarded in 2014.While the total value of power genera-

tion contracts across all technologies rose by 61 per cent in 2015, reaching $32.9bn, from $20.5bn in 2014, the proportion of renewables deals was significantly higher.

In 2015, renewable energy projects accounted for almost 24 per cent of all generation awards, compared with only 7 per cent the previous calendar year.

While hydropower has been imple-mented across the region for several years, 2015 was the year that wind, and particu-larly solar, emerged on a utility scale.

Out of the $7.7bn of renewable energy contract awards in 2015, 58 per cent ($4.5bn) were for solar power projects.

Key marketThe largest contracts awarded were for the Noor 2 and 3 concentrated solar power (CSP) projects in Morocco in January, which was followed by the award of a 200MW photovoltaic (PV) plant in Dubai.

Acwa Power was successful in all three of these major projects, all procured under the independent power producer (IPP) model, cementing its position as one of the key developers for renewable energy in the Middle East. The developer added to its renewable energy portfolio in November, when it was awarded a con-tract to develop a 120MW wind farm proj-ect in Morocco.

Morocco will remain a key renewables market in 2016 as it pushes ahead with its first PV projects, and prepares to award contracts for an 850MW wind power

scheme. Dubai has invited bids for the 800MW third phase of its Sheikh Moham-med bin Rashid al-Maktoum solar park, which will be by far the largest collection of solar projects in the region.

Jordan was a key renewable energy market in 2015, as it concluded contracts for several solar projects under engineer-ing, procurement and construction and feed-in-tariff models.

For the feed-in-tariff programme, Amman reached financial close for 12 projects in the first round of schemes. It also made prog-ress with utility-scale plants, culminating in the award of the $128m contract to Spain’s TSK/UAE’s Environmena to build a 103MW solar plant in the Al-Queira region.

Egypt also emerged as one of the region’s largest solar markets in 2015, with a con-tract award for a 220MW wind farm to Spain’s Gamesa. The country will be a major renewables markets in 2016, as it seeks financial close on the first projects under its 4,300MW feed-in-tariff programme.

It is also set to award a deal for a 250MW solar IPP in the Gulf of Suez, and plans to tender three IPP contracts in the West Nile area: a 250MW wind farm; a 200MW PV solar plant; and a 50MW CSP scheme.Andrew Roscoe

Regional

Moroc-co will remain a key market in 2016 as it pushes ahead with pho-tovoltaic projects

$7.7bnValue of renewable contract awards in 2015

58% of those awards were for solar

24%of all generation awards were for renewables in 2015 p

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Business Outlook

Contract awards predicted to fall sharply in 2016A decline of 15 per cent is forecast for contract awards in the region, but upcoming awards in Dubai provide some optimism

The GCC is set to record a sharp fall of 15 per cent in contract awards in 2016, as lower oil prices affect gov-ernments’ capital investment

plans, according to the latest annual forecast by regional projects tracker MEED Projects.

The forecast, based on more than 2,100 planned and unawarded projects in the region, predicts that the total value of contracts will fall to $140bn this year, compared with $165bn for the whole of 2015.

Worst hit will be Saudi Arabia. The value of the kingdom’s market is pre-dicted to drop by almost a fi fth, equal to nearly $10bn, to $40.7bn in 2016.

Riyadh has seen its revenues fall in line with oil prices, and its 2016 budget forecasts that revenues will be SR513bn ($136.8bn), almost SR100bn lower than last year. At the same time, budgeted spending of SR840bn will be far below the estimated SR975bn expenditure in 2015.

GCCMEED Projects

The region’s leading project tracking service. Gain access at:www.meedprojects.com

The UAE, buoyed by continued spending in the Dubai real estate and infrastructure sectors, and long-term strategic spending in the Abu Dhabi oil and gas sector, is forecast to see contract awards fall slightly to $36.5bn from $37.4bn. Dubai’s commitment to its long-term vision will ensure spend-ing on projects is maintained despite the worsening fi nancial situation.

Improved averageThe third-largest projects market in the GCC will be Kuwait at $24.3bn, down from a record-high $31.5bn in 2015. It will be followed by Qatar, which will see contract awards fall by $7bn to $22.3bn. While the two markets will perform worse than last year, their 2016 forecast is still considerably improved on their fi ve-year spending average.

Oman and Bahrain are expected to maintain last year’s spending levels, re-

Dubai’s focus on its long-term vision will ensure project spending is maintained

UAE

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Qatar

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Bahrain

36.540.7

22.3

13.5

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*=Forecast for 2016. Source: MEED Projects

GCC CONTRACT AWARDS*$bn

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86-87 MEED Projects.indd 86 21/01/2016 20:10


Iraq’s projects market saw the biggest increase on the

Gulf Projects Index in the week ending 15 Jan-uary, according to data from regional projects tracker MEED Projects.

Stable marketThe revival of the $6.5bn Missan oil re-finery scheme enabled Iraq’s market to record growth of 1 per cent.

The overall Gulf in-dex witnessed a 0.1 per cent increase, while the GCC projects markets remained stable with no changes.

Bahrain saw a 0.1 per cent growth in its projects market as $71m-worth of new schemes were launched

and revived, with no completed or cancelled projects bringing down the total.

Saudi Arabia’s market contracted by 0.1 per cent as $2.3bn-worth of schemes were either completed or put on hold. This includes the decision by the Finance Ministry instructing the local Saudi Binladin Group to stop work on the ex-pansion of the Proph-et’s Mosque in Medina.

The UAE index, mean-while, saw a 0.2 per cent gain as $3.3bn-worth of projects entered the market, including the $450m Jebel Dhanna Hotel complex in Abu Dhabi. Hossam Abougabal

Iraq gains fail to lift Gulf Projects Index

0

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GCC ContraCt awardS$bn

2015 forecast 2015 actual

Source: MEED Projects

cording $13.5bn and $2.8bn respective-ly, although their comparatively small sizes mean this will have a relatively small impact across the region.

Some optimismWhile the forecast makes for sombre reading, it does not indicate the col-lapse in the projects market some may have feared.

In the first two weeks of 2016, a se-ries of major contract awards in Dubai, such as the $870m Royal Atlantis Re-sort & Residences project, the $380m

Palm Gateway tower scheme, and the $180m One at Palm Jumeirah project, indicates that activity in real estate – the most vulnerable of sectors to the oil price downturn – is continuing.

Governments also realise they must maintain project spending, particularly in social infrastructure, to offset any potential unrest. Moreover, state client surpluses and other financing solutions, including private sector financing, ex-port credit, and public-private partner-ships, are also being explored. Ed James

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Gulf ProjeCtS IndexValue of projects planned or under way ($bn)

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Dec 2012

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Dec 2007

Dec 2006

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86-87 MEED Projects.indd 87 21/01/2016 20:10


Business Outlook

Joint venture wins airport dealContractors also appointed for specialist systems on $1.1bn expansion project

na’s CIMC for passenger air bridges; Vanderlande of the Netherlands for the baggage handling system; US-based L3 Communications for security screening equipment; and Finland’s Kone for moving walkways, escalators and elevators.

A contract was also awarded to France’s SETEC for the design of a maintenance, repair overhaul facility.Colin Foreman

A joint venture of Dubai- based Arabtec Construc-tion and Turkey’s TAV has been awarded the contract to build a new terminal

building as part of the $1.1bn expan-sion of Bahrain International airport.

The deal was announced during the Bahrain International Airshow.

The project, financed by the Abu Dhabi Fund for Development, involves the construction of a 170,000-square-metre terminal build-ing, associated buildings, and infra-structure such as car parks and aircraft parking areas.

Once completed, the expansion pro-ject will increase the airport’s capacity to 14 million passengers a-year.

The deal also involves managing contractors that have won specialist systems contracts. They are: Chi-

Further reAding

Nakheel awards Palm Gateway contractDubai developer Nakheel has appoint-ed a South Korean/ Chinese joint venture to build its AED1.4bn ($381m) Palm Gate-way scheme on the Palm Jumeirah.

Local contractor wins Dubai hotel construction dealThe local Al-Basti & Muktha has been awarded an estimated AED700m deal for the construction of the Mandarin Oriental Hotel in Dubai.

Aldar invites interest in Abu Dhabi towers Local developer Aldar Properties has invited companies to bid for a contract to build its two-tower Meera Shams residential development in Abu Dhabi.

Prequalifications in for Oman museum construction workOman’s Royal Court Affairs has received prequalification documents for its estimated $500m Oman Renaissance Museum project.

Read more about construction on www.meed.com/construction

BAhrAin

Bids in for Al-Maktoum airport expansionthe existing passenger terminal at the Al-Maktoum International airport. The the fit-out was completed by South Korea’s Kumho.

Located in Dubai South, formerly known as Dubai World Central, the Al-Maktoum International airport began operating passenger flights in October 2013, following the start of cargo ser-vices in June 2010 and general aviation operations in April 2011. The expansion of the existing terminal is not part of the scope of the planned $32bn expan-sion of Al-Maktoum International.Colin Foreman

Dubai Aviation Engineering Projects has received bids for the contract to expand the existing passenger terminal at Al-Maktoum International airport in Dubai’s Jebel Ali area.

It is understood local and interna-tional contractors submitted offers.

The contract involves limited amounts of building work and is mostly mechanical, electrical and plumbing work together with the supply of spe-cialist airport systems such as baggage handling systems.

A joint venture of Arabtec Construc-tion and Germany’s Max Boegl, built

uAe

Dec 15 Dec 14

disembarked 366,721 347,958embarked 364,959 361,594transit 9,856 12,877total 741,536 722,429

Source: Ministry of Transport & Telecommunications

BAhrAin internAtionAl pAssenger movements

82 Construction.indd 82 18/02/2016 17:46


Business Outlook

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It was clear from the pledges and rhetoric emanating from the Saudi Water & Electricity Forum in Riyadh in mid-February that improving efficiency in the energy

and power sectors has risen to the top of the kingdom’s agenda.

Demand for utilities continues to rise at a rapid pace, with peak demand growth for electricity increasing above 10 per cent in 2015. While population growth remains robust at 2.5 per cent, consumption growth levels from resi-dential and industrial customers remain much higher. According to the Saudi deputy petroleum minister, energy con-sumption will increase by 4-5 per cent a year until 2030 unless action is taken.

With the Ministry of Water & Elec-tricity (MOWE) forecasting that peak demand will reach 90,000MW by 2022,

up from the 62,260MW recorded in 2015, significant investment in new capacity will be required. But Riyadh’s strategy towards meeting the projected capacity demands is changing.

From the oil and utility ministries to the clients procuring and distributing electricity and water, the message is uni-form: efficiency must be improved and consumption levels must be reduced. Riyadh is targeting changes in the sup-ply and demand side to meet this goal.

While improving efficiency has been discussed in the kingdom’s utilities sec-tor for several years, the drop in oil pric-es has increased the urgency. With state revenues having fallen dramatically, a concerted effort is being made through-out the country’s governing bodies to reduce waste and maximise returns.Andrew Roscoe

Saudi Arabia’s government wants to reduce waste and save costs in the energy and power sectors. The fall in oil prices has increased the urgency

Riyadh’s drive for efficiency

PoweR & wateR

83 Power and Water cover.indd 83 18/02/2016 17:45


Business Outlook

Saudi Arabia looks at switching Jeddah 4 procurement model

Advisers selected for power spot market

Kingdom now considering independent water project model instead of engineering, procurement and construction

Saudi Arabia’s Saline Water Conversion Corporation (SWCC) is considering us-ing the independent water project (IWP) procurement

model for the delivery of the Jeddah 4 desalination plant instead of the cur-rently planned engineering, procure-ment and construction (EPC) model.

Setting precedentSWCC has extended the bid submission date to 15 March for the EPC deal. The plant will be the first water project to be procured using a public-private part-nership (PPP) model for several years. SWCC tendered its last independent water and power project in 2007.

At the recent World Future Energy Summit in Abu Dhabi, SWCC’s

Andrew Roscoe

Oman Power & Water Procurement Company (OPWP) has appointed tech-nical and legal advisers for its plans to establish a spot market for electricity trading in the sultanate.

Finland’s Poyry has been appointed as technical adviser while multinational law firm Dentons has been appointed as legal adviser.

Developing framework The advisers will play a key role in de-veloping a framework for the planned creation of an electricity spot market. OPWP has set a target of introducing

governor, Abdulrahman al-Ibrahim, said the water company may bring back the PPP model for major schemes as a result of the changing economic climate in the new lower oil prices era. “The government is committed to [project] development, but there needs to be a change in approach,” said Al-Ibrahim.

The fourth phase of the Jeddah scheme will expand capacity by 400,000 cubic metres a day. SWCC wants to commission the project by 2019.

MEED reported in November that more contractors were attempting to prequalify to participate in the EPC bidding process for the Jeddah 4 plant, with only two groups having been ini-tially prequalified for the scheme.Andrew Roscoe

Read his coverage of power and water projects across the region at:www.meed.com/power

the spot market in 2019-20. MEED first reported in October 2014 that the sultanate was planning to implement a spot market by 2020.

Under the plans, OPWP will remain the single offtaker for electricity and will take on an additional role as market operator.

The spot market is planned to in-crease competition and allow producers to sell excess, older or uncontracted capacity to OPWP. It is unclear how much extra capacity the new market mechanisms will provide.Andrew Roscoe

SAuDi ArAbiA

omAn

omAn peAk power DemAnD*MW

5,6

53

6,2

25

6,7

97

7,4

64

8,0

76

*=Forecast. Source: OPWP

20152016

20172018

2019



Kingdom and World Bank join on power plan

Riyadh commit-ted to consid-er all possible options for prima-ry energy sources

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peak electricity demand in the kingdom increased by 10.2 per cent in 2015

saudi Arabia’s power sector will require SR500bn

($133.3bn) of invest-ment in new projects to ensure supply remains above demand.

Speaking at the Saudi Water & Electricity Fo-rum, Minister of Water & Electricity Abdullah al-Hussayen said the investment would be required to meet the kingdom’s growing power demand.

rapid growthThe Ministry of Water & Electricity forecasts peak demand for power will reach 90,000MW by 2022, up from the 62,260MW in August 2015. Peak consump-tion of electricity grew by more than 10 per cent in 2015.

Also speaking at the conference in Riyadh, Ziyad Mohammed al-Shiha, CEO of state utility Saudi Electricity Company (SEC), said 13GW of new gener-ation capacity would come online in the next five years, boosting the kingdom’s installed ca-pacity by 13 per cent.

In addition to the construction of new

capacity, Al-Shiha said a key priority for SEC was improving effi-ciency of existing and new plants.

The CEO said the utility was targeting an efficiency rate of 40 per cent by 2020, up from 32 per cent in 2013.

The governor of the kingdom’s Electric-ity & Cogeneration Regulatory Authority told delegates at the Saudi conference that improvements in the efficiency of power generation infrastruc-ture would result in SR50bn of savings over the next 20 years.Andrew Roscoe

riyadh set to invest $133bn in electricity

Saudi Arabia has enlisted the help of the Washington- based World Bank to help produce a national strategy for electricity.

Speaking in Riyadh on 8 February at the Saudi Water & Electricity Forum, Saleh al-Awaji, deputy minister for electricity at the Ministry of Electricity & Water, said the authority was working with the World Bank to develop a national strategy for the kingdom’s electricity sector.

Al-Awaji said a top priority of focus for the govern-ment was on improving the efficiency of both energy demand and supply.

The deputy minister said the strategy would assist with efforts to counter the challenge of rapid growth in demand for electricity, caused by an expanding population and rising consumption levels.

Al-Awaji said that from now on, a target level of 50 per cent efficiency for power generation resources would be targeted.

While the deputy minister acknowledged that oil and natural gas would still form the major component of the kingdom’s power sector in the coming years, he said the government was com-mitted to “consider all possible options for primary energy sources, including enhancing the use of renewable technology”.

“With the competitive price of renewable energy these days, renewables are a good option, and will offer a good opportunity for the private sector,” said Al-Awaji.Andrew Roscoe

$133bninvestment required in saudi power sector over next 10 years

$13.3bnsavings that can be made if efficiency is improved

40%Efficiency of power plants targeted by Riyadh



Business Outlook

Dubai pushes ahead while other markets in the region struggleThe emirate has awarded contracts on key projects with developers confi dent in the market’s long-term prospects

GCCMEED Projects


prospects. As a result, companies in-volved in project development can feel quietly optimistic for the year ahead in the emirate, even if activity elsewhere in the region slows down.

Public rebuttalThe Dubai authorities have also revealed they are not restricting their activity to already ongoing schemes.

The launch of the iconic tower by Emaar and Dubai Holding as part of their Dubai Creek Harbour develop-ment is an equally public rebuttal to market sceptics lamenting the collapse in oil prices.

Designed by acclaimed Spanish architect Santiago Calatrava, the scheme shows the government is still prepared to proceed with high-end and expensive tower projects despite the economic outlook.

Equally signifi cant is the announce-ment on 1 February of the Arab world’s largest library. The $270m Sheikh Mohammed bin Rashid Library has been designed in the shape of an open book and will be located close to Culture Village, near Dubai Creek. The seven-storey, 1-million-square-foot project is planned to open in 2017, and will house more than 4.5 million books.

The newly announced schemes, along with those already awarded in the fi rst month of the year, are why re-gional projects tracker MEED Projects is optimistic about the Dubai projects market in 2016.

Overall, MEED Projects has forecast that the UAE will post $36.5bn-worth of contract awards this year, down only

If the region’s projects market is slowing down as a result of lower oil prices, then no one is telling Dubai.

The emirate has had an impres-sive start to the year, awarding more than $3bn-worth of contracts on sever-al iconic hotel and real estate schemes in January alone.

Topping that was the announcement on 6 February of a new, as yet unnamed, super high-rise tower.

Ever pushing ahead, the message from Dubai is that it is not going to let

the collapse in oil prices affect its long-term growth ambitions.

Contracts awarded in the early weeks of the year included the $840m second phase of the Atlantis Hotel on Palm Jumeirah, Nakheel’s $380m Palm Gateway Towers, the $370m ICD Brookfi eld Place, and Wasl’s $190m Mandarin Oriental Hotel among others.

The awards show developers are confi dent in the market’s long-term

The prog-nosis for Dubai’s con-struction sector is fairly positive

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86-87 Meed Projects.indd 86 18/02/2016 17:43


Work starts on Egypt’s capital city project

Hassan Allam Construction is carrying out infra-structure work and building a hotel and conference hall

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Firm inks co-development contract for estimated $4bn mixed-use project

Egypt’s Sixth of October De-velopment &

Investment Company (Sodic) and Heliopolis Development Housing (Heliopolis Housing) have signed a co- development contract for a major mixed-use scheme in Cairo.

Sodic will devel-op 70 per cent and 69.8 per cent of the residential and com-mercial units respec-tively, while Heliopolis House will develop the rest, according to a statement.

The project, which will be developed over a period of 10 years in east Cairo, is expected to cost about $3.8bn.

The statement says the scheme will create 40,000 direct and indirect jobs over the course of its development.

Sodic participated in Heliopolis Housing’s most recent land auc-tion as part of the firm’s strategy to increase its land bank and pursue new opportunities for growth, said a company spokesperson.

The co-development deal marks Sodic’s

first revenue-sharing venture. In September last year, Sodic secured about 125,500 square metres of land in 6th of October City, west of Cairo. The company has since has sub-mitted its masterplan for the scheme. The masterplan, which was

developed by the local ECG Engineering Con-sultants Group, is ex-pected to be approved by the end of March, according to Sodic’s managing director, Magued Sherif.

Sodic also signed an agreement with the local Holding Company for Water and Waste Water for the rehabili-tation of 1,000 homes within inner-city slums.Hossam Abougabal

Sodic signs deal for major Cairo scheme

10Years needed to complete Cairo scheme

40,000Jobs created by project

125,500square metres of land secured by sodic

Egypt

The local Hassan Allam Construction has started work on $783m-worth of contracts at Egypt’s New Capital City scheme. A company spokesperson told MEED the firm is carrying out infrastructure work, as well as building a hotel and a conference hall.

The engineering, procurement and construction contracts were directly negotiated with the Ministry of Housing, Utilities & Urban Development, says the spokesperson. It is understood Hassan Allam is working on 60 kilometres of roads, a 500-room hotel and a 20,000-seat conference hall.

Egypt’s New Capital City project, which was announced during the Egypt Economic Development Conference in March last year, has been central to the government’s promises to improve living standards and press ahead with major housing, infrastructure and transport schemes. It was recently announced that work is expected to start in April on the first residential section of the project.

It is understood much of the work on the $40bn first phase of the New Capital City will be carried out by China State Construction Engineering Corporation, the local Petrojet and state-owned Arab Contractors. Housing min-ister Mostafa Madbouly said the residential scheme will comprise 30,000 units, although no further details have been given.

International contractors have told MEED the ministry has not reached out to them or provided details of planned and under-way projects that are part of the scheme. Others have raised concerns over Cairo’s pro-curement process regarding this project. Egypt is expected to assign up to 95 per cent of the capital city project to local contractors.Hossam Abougabal

81 Construction.indd 81 17/03/2016 17:51


Business Outlook

Algeria is the latest country in the Middle East and North Africa to push ahead with early preparations for a nuclear power facility.

It follows shortly after Egypt inked a deal to build its first atomic power facil-ity. In 2015, agreements were signed for the first nuclear plant in Jordan, while the UAE’s pioneer nuclear facility is under construction. Iran has also signed deals to expand its maiden Bushehr facility. Saudi Arabia has the most am-bitious nuclear plans, and is planning to install up to 19GW of capacity.

There are two main reasons why some of the region’s largest utilities are starting to move towards nuclear energy. The first of these is part of plans to diversify their energy sources for power generation. This is becoming

more of a priority for governments in light of increasing economic and political instability.

The second reason for the increasing interest is the rapid growth of the re-gion’s renewable energy sector. Nucle-ar power can provide large capacities of baseload power, while also reducing carbon emissions.

The major hurdle for states to succeed with nuclear programmes is the capital cost. It is likely many of the planned schemes in the region will include financing agreements with the country selected to build the facilities.

If governments are able to secure public approval and financing for nu-clear power, the region is set to become an increasingly attractive market for the world’s nuclear energy providers.Andrew Roscoe

If governments are able to secure public approval and financing, the Middle East and North Africa region’s budding nuclear power market could become increasingly attractive for atomic energy providers around the world Committed to nuclear power

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Power & wAter



Business Outlook

Mitsui team signs power purchase agreement for Ibri/Sohar 3 IPP

Algeria holds nuclear talks with Russia

Split-site project will be sultanate’s largest independent power project

Andrew Roscoe

The Ibri/Sohar 3 scheme will be split between two sites in Sohar and Ibri. The plants are being tendered as one developer contract, but a separate special-purpose vehicle (SPV) will be formed for each plant. The Sohar facil-ity will have a generation capacity of 1,700MW, and the Ibri plant will have a total capacity of 1,450MW.

The preferred bidder saw off com-petition from two other groups, led by UK/French Engie (formerly GDF Suez) and Japan’s Marubeni. The three groups had submitted tender clarifica-tions on 1 November, after submitting commercial proposals on 30 August.

The IPP is part of the government’s efforts to meet rising demand for pow-er in the Main Interconnected System.Andrew Roscoe

Aconsortium of Japan’s Mitsui and Saudi Arabia’s Acwa Power has signed the power purchase agreement (PPA) for the

3,150MW Ibri/Sohar 3 independent power project (IPP) in Oman.

MEED reported in January that the project owner, Oman Power & Water Procurement Company (OPWP), had selected the Mitsui team as preferred bidder for the scheme.

Majority share Mitsui has the majority share in the winning consortium, with 50.1 per cent ownership. Acwa Power holds 44.9 per cent and the local Dhofar International Development & Investment Holding the remaining 5 per cent.

Andrew Roscoe talks about how governments are turning to private in-vestors to finance power projects on MEEDtv at www.meed.com

with Algeria on the construction of a nuclear power plant. The North African state is planning to commission the nuclear power facility in 2026.

The scheme is part of Rosatom’s aim to broaden its portfolio in the Middle East and North Africa region.

In November, the nuclear provider signed an agreement with Cairo for the construction and operation of Egypt’s first nuclear power plant at El-Dabaa.

In March 2015, Rosatom signed an agreement with Jordan for the construc-tion of two nuclear power reactors.Andrew Roscoe

Representatives from Algeria’s nuclear body and Russia’s Rosatom have taken part in the first talks of the Algerian-Russian Joint Committee for Cooperation on the peaceful uses of nuclear power.

“The parties discussed ways of further cooperation on the peaceful uses of atomic energy, and devised an action plan for a move on to a new level of cooperation,” the Algerian Commissariat of Atomic Energy (Comena) reported.

In October 2015, Rosatom an-nounced it was beginning consultations

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Abu Dhabi to fast-track 350MW solar project

Abu Dhabi Electricity & Water Company (Adwec) is planning to fast-track its planned 350MW solar inde-pendent power project (IPP).

Companies have been invited to submit prequali-fication entries by 28 March for the main developer contract. The project owner’s decision to fast-track the scheme will mean developers only have three months to submit proposals.

MEED now understands that a list of prequalified companies and issuance of request for proposals (RFP) are due in April, with the bid submission date set for July. Adwec is planning to shortlist bidders in September 2016, and is planning to sign the pow-er purchase agreement (PPA) with the successful companies in December. The PPA will be signed for a duration of 25 years.

The project owner has set a target for financial close by March 2017, with commissioning of the solar plant planned by March 2019. Adwec received bids in Janu-ary for the technical consultancy deal for the project.

According to sources within the emirate’s power sector, the project owner is likely to split the work into two or more phases. The IPP will use photovolta-ic solar technology and will be located near the town of Sweihan in the eastern region of Abu Dhabi.

The project will reassert the emirate’s position as a major regional player in the renewable energy market, since it started to trail others after it com-missioned Shams 1 in March 2013, the region’s first utility-scale solar energy plant.Andrew Roscoe

The Abu Dhabi IPP will use photovol-taic solar panels

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Enel-led team will build independent power projects at five different sites

aconsortium led by Italy’s Enel Green Power

has been selected as preferred bidder for the 850MW independ-ent power producer (IPP) wind programme in Morocco.

After evaluating pric-es from five bidders, the Office National de l’Electricite et de l’Eau Potable (ONEE) selected a group of Enel Green, the local Nareva Holding and Germany’s Siemens to develop five wind farms.

The team is expected to spend $1.1bn to develop the facilities.

Five sitesThe farms will be locat-ed at the following sites:■ Tangier 2 (Tangier; 100MW);■ Tiskrad (Laayoune; 300MW);■ Boujdour (Boujdour; 100MW);■ Midelt (Midelt; 150MW);■ Jbel Lahdid (Es-saouira; 200MW).

The project will be developed using a build-own-operate- transfer deal, with the preferred bidder ex-pected to sign a 20-year

power purchase agree-ment with ONEE.

The 850MW project is the second phase of Morocco’s Integrated Programme for Wind Energy, launched in 2010. The first phase comprises a 150MW farm at Taza, due to be commissioned in 2017.

Rabat has set a target of 42 per cent of power generation to come from renewable energy by 2020. This is scheduled to include wind power capacity of about 2,000MW.

Siemens has an-nounced it is establish-ing a factory in Moroc-co to manufacture rotor blades for onshore wind turbines. The firm said construction is to com-mence in early 2016, with the factory aiming to become operational within a year.

The investment is set to cost $110m and will create up to 700 jobs. The factory will be catering to what the CEO of Siemens’ re-newables division says are growing onshore wind power markets in Africa, the Middle East and Europe.Andrew Roscoe

Rabat selects bidder for wind programme



Business Outlook

SAUDI ARABIA

Saudi refi ning and chemicals spending to pick up in 2016Three major projects are approaching the contract award phase in the kingdom

MEED Projects


Part of this increase will come from the 400,000-b/d refi nery under con-struction in Jizan, but the timelines for further expansions are less clear.

Much of the kingdom’s investment in refi ning and petrochemicals is aimed at production for export markets. With the current low oil prices and slowing glob-al economic growth, the business case for boosting exports is less convincing than in times of previous expansion.

Three projectsThis year promises to be a much stronger year for new investments, with three major projects approaching the contract award phase.

In February, fi rms submitted bids for three packages on Rabigh Refi ning & Petrochemical Company’s (PetroRab-igh’s) clean fuels project. PetroRabigh tendered the engineering, procurement and construction (EPC) packages in October 2015. The facilities will be built at Rabigh in the Mecca province.

Meanwhile, Aramco’s clean fuels project at Ras Tanura has been revived following speculation that it might be cancelled due to low oil prices. The fi rm has invited bids for two packages on the estimated $3bn scheme by 11 May. The Ras Tanura scheme was meant to have been awarded in late 2013 or early 2014, but was earmarked for retender-ing after the original bids came in well over Aramco’s preferred budget.

Deals on both clean fuels schemes are expected to be awarded in the second half of 2016.

Saudi Arabia’s Farabi Petrochemi-cals Company is expected to tender a

This year Saudi Arabia will start up various production units at the most ambitious hydrocarbons project in its history – the $20bn Sadara

chemicals complex in Jubail.The completion of the megaproject

has coincided with an overall slowdown in investment in the kingdom’s oil refi ning and petrochemicals sector.

Firms in Saudi Arabia spent $34.7bn on refi ning and chemicals schemes in 2010-12, but only $7.8bn in the past three years, according to regional pro-

jects tracker MEED Projects. In 2015, just over $500m of deals were award-ed – a long-term low for the region’s largest hydrocarbons market.

Signifi cant investments will be needed for Riyadh to meet its long-term downstream development plans. The kingdom is planning to increase its refi ning capacity to more than 8 million barrels a day (b/d) from 5.4 million b/d, Amin Nasser, CEO of Saudi Aramco, said in March. PH

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The king-dom is planning to grow its refi ning capacity to more than 8 million barrels a day

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Documents

POWER AND WATERlp.plexusnetwork.com/rs/407-IXB-529/images/MEED-Q1-Power... · 2016. 8. 3. · first PV projects, and prepares to award contracts for an 850MW wind power scheme. Dubai