MANAMA, Bahrain, 1 August 2004 — Bahrain signed several agreements yesterday with a Western- and Gulf-based consortium for the kingdom’s first independent power plant project to help the tiny island state meet its growing power needs.
The estimated $500 million Al-Ezzel Power Plant will be equally owned by Belgium-headquartered Tractebel EGI and Kuwait-based Gulf Investment Corp. Bahraini investors will be gradually allowed to take up 30 percent stake in the plant, which will be located in Hidd, northeast of the capital, Manama, Finance Minister Abdullah Saif said after the signing ceremony.
Tractebel EGI and GIC will provide the equity, and international banks HSBC and France’s Societe Generale SA have underwritten the debt financing. A number of Bahraini and international banks are participating in the financing, Saif said.
The plant will produce 950 megawatts per day of electricity, meeting one-third of the power requirements of the country, said Guy Richelle, Tractebel’s chief executive officer for the Middle East.
It will be completed in two phases. The first phase of 470 megawatts capacity is slated to be achieved by April 30, 2006. The plant will reach full capacity by May 1, 2007, when it will begin supplying power to the Ministry of Electricity and Water under a 20-year agreement.
Bahrain will spend $100 million for the infrastructure needed for distributing power from the plant, said Electricity Minister Sheikh Isa bin Ali Al-Khalifa, who also signed yesterday’s agreements on behalf of Bahrain.
Bahrain’s current power capacity is some 1,850 megawatts of electricity, while current consumption is as high as 1,650 megawatts.
The country’s power demand is growing at the rate of 7 percent per year. The government has spent millions of dollars on sustaining a steady flow, but power consumption goes up drastically during the summer, and the strain on the system sometimes results in breakdowns or power outages amid apparent temperatures — factoring in wind and humidity — that can top 50 degrees Celsius (122 degrees Fahrenheit).
Tractebel EGI is a business division of France-based SUEZ, an international industrial and services group.
GIC, equally owned by the six Gulf Cooperation Council States — Saudi Arabia, Kuwait, Oman, Bahrain, Qatar and the United Arab Emirates — provides a range of financial services that support the development of private enterprise and economic growth in the region.
