ACWA-led Firms to Invest $3.27 Billion In Kuwait’s IWPP

The Kuwait Authority for Partnership Projects (KAPP) on Sunday has signed an agreement with a consortium of companies including ACWA Power and Gulf Investment Corporation for investing $3.27 billion in the expansion of the Az-Zour North power plant in Kuwait.

The project, encompassing phases two and three, will add 2.7 GW of power and 120 million gallons of desalinated water per day on top of the plant’s current production using combined-cycle technology. This investment aims to address severe electricity shortages in Kuwait and is part of a larger effort to involve the private sector in infrastructure development.

This expansion will make it the largest power plant project in Kuwait’s history. KAPP described the venture as a pivotal step in the state’s strategy to meet growing demand for water and electricity, strengthen the national power network, and support future development projects.

Located on the Arabian Gulf coast about 100 km south of Kuwait City, the new plant will occupy roughly 500,000 sq. m. It will be adjacent to the western part of the first phase of the Al-Zour North Plant and the northern section of the Al-Zour South Plant.

The IWPP plant operates with a mix of liquified natural gas and high-pressure natural gas. Construction is expected to take three years, with the expansion aimed at easing the country’s acute power supply shortages.

It may be recalled that Kuwait faced an energy crisis last year after a 300 MW steam turbine at the 6 GW Az-Zour South power complex went offline as peak load reached 16.81 GW, with extreme temperatures worsening the crisis.

Encouraging Private Sector

Dr Adel Al-Zamel, Undersecretary of the Ministry of Electricity, Water, and Renewable Energy, said that the project is part of a broader package aimed at enhancing the country’s energy infrastructure. This includes the first phase of the Al-Khairan Power Plant, phases three and four of the Al-Shagaya renewable energy project, and plans to modernize older power plants in Shuaiba, Az-Zour, and Doha.

He emphasised that the plant aims to encourage private sector participation, leveraging its expertise to reduce construction and operating costs, accelerate completion, and optimise natural resource use.

Under the agreement, the consortium will design, finance, build, operate, and maintain the plant, producing electricity and desalinated water. Public shares will be issued to support execution, aligning with Law 39/2010 on establishing Kuwaiti shareholding companies for power and water projects and its amendments, as well as Law 116/2018 on public-private partnerships.

A group of local and international banks will finance the project with contributions exceeding $3.2 billion. The North Az-Zour Plant will be Kuwait’s first privately-owned gas-fired combined cycle power and desalination facility.

Its output will be supplied to the national power and water grid under a 40-year Energy Conversion and Water Purchase Agreement (ECWPA) with the Ministry of Electricity and Water.