In a strategic move to bolster Kuwait’s energy and water infrastructure, a consortium led by Saudi Arabia’s ACWA Power, a global leader in developing, owning, and operating power generation and desalination plants, announced the signing of a landmark power and water purchase agreement (ECWPA) for the second and third phases of the Al-Zour North Independent Water and Power Project (IWPP). The total value of the contract is US$4.1 billion, making it one of the largest public-private partnership projects in the region.
Project context and its strategic importance to Kuwait
This project is part of the “New Kuwait 2035” vision, which aims to transform the country into a financial and commercial hub that attracts investment, with the private sector playing a pivotal role in driving economic activity. Like other countries in the region, Kuwait faces increasing demand for electricity and water due to population growth and urban and industrial expansion. Ensuring a sustainable and reliable supply of energy and water is a cornerstone for achieving sustainable development goals and ensuring economic stability. The Al-Zour North project represents a successful model for implementing the Public-Private Partnership (PPP) model, which is adopted by the Kuwait Authority for Partnership Projects (KAPP) to attract international expertise and foreign capital for the development of vital infrastructure projects.
Technical details and advanced technologies
According to the company's statement published on the Saudi Stock Exchange (Tadawul) website, the Al-Zour North project (phases 2 and 3) consists of two main components:
- Power plant: It operates using combined cycle gas turbine (CCGT) technology, a highly efficient technology that reduces fuel consumption and carbon emissions, and will have a total production capacity of 2,700 megawatts.
- Water desalination plant: It will rely on reverse osmosis (RO) technology, which is the most energy-efficient technology in the world for seawater desalination, and will have a production capacity of 545.5 thousand cubic meters of desalinated water per day (equivalent to about 120 million imperial gallons).
Expected impact and business model
The project is expected to significantly contribute to meeting Kuwait’s future electricity and water needs, enhancing resource security, and creating new job opportunities during the construction and operation phases. The project will be developed under a 25-year Build-Operate-Transfer (BOT) model, whereby the contracting entity, the Kuwaiti Ministry of Electricity, Water and Renewable Energy (MEWRE), will purchase the entire electricity and water output of the project for the duration of the agreement, providing stable and guaranteed cash flows for investors. The agreement was signed with Gulf Energy and Water Alliance (GEWA), the project company owned by the Kuwait Authority for Partnership Projects (KAPP), ACWA Power (24%), and Gulf Investment Corporation (GIC). The project’s financial impact will be announced upon reaching financial closure.
