News digest

Algeria: ABB has won three contracts worth $85m for three projects to upgrade Algeria’s power grid. The three projects are scheduled for completion within 15 months. Two of the projects involve installation of 60 kV substations and associated equipment, while one involves the expansion of two existing 220 kV substations.

Bulgaria: The Japan Bank for International Cooperation (JBIC) has signed a $231m loan agreement supporting the refurbishment of the Maritsa East II thermal power plant in Bulgaria. The loan will enable the Maritsa East II Thermal Power Plant Company to import turbines, generators and desulphurizers from Mitsui & Co. Ltd.

Iraq: Parsons Peebles is helping to provide power to Iraq through the provision of a specially designed mobile turbo generator. The generator is capable of supplying the needs of 100 000 homes. It is currently operating in Tikrit but can be easily transported to other areas.

Kenya: The Kenyan government is to sell 30 per cent of its shareholding in the Kenya Electricity Generating Company (KenGen) by June 2005. The sale will be made through an initial public offering (IPO) and will help to attract private capital to the power sector.

Romania: The Japan Bank for International Cooperation (JBIC) has signed a loan agreement totalling $24m with Transelectrica, the Romanian national power transmission corporation. The loan will support the construction of the Brazi West substation in southern Romania, for which Itochu Corporation is supplying equipment.

Russia: Russia’s Trading System Administrator (ATS) is reported to be in negotiations with the Russian stock exchange (RTS) to launch electricity derivatives trading. ATS has already launched simulated trading of electricity futures, allowing participants to determine the main factors influencing trading in preparation for a fully-fledged derivatives market.

Saudi Arabia: Siemens Power Generation has received orders worth g120m ($145m) for projects in Saudi Arabia. Siemens will build a turnkey gas turbine power plant for Saudi Electricity Company (SEC-COA) Central in Riyadh, and will also supply three gas turbines to National Contracting Company (NCC) for the expansion of two existing plants in Bisha and Asir.

Zambia: Zesco, Zambia’s national power utility, is to spend $40m on the rehabilitation of obsolete equipment at the Victoria Falls hydropower station. The plans are part of a wider Power Rehabilitation Project, which will see $250m invested in the power sector.

Tractebel wins Sohar IWPP

Oman’s ministry of housing, water and electricity (MHEW) has selected Tractebel EGI, a business division of Suez, to design, build, own, operate and maintain the Sohar independent water and power project (IWPP) in Oman. The plant will be owned by the Sohar Power Company and located in the Sohar Industrial Area, north of Muscat, on the Gulf of Oman.

Tractebel’s partners in the project include National Trading Corp., Zubair Corp., WJ Towell & Co., Sogex Oman, and the Ministry of Defence Pension Fund. The plant will consist of a 585 MW combined cycle gas turbine plant and a 6250 m3/h water desalination plant.

The $500m project will sell electricity and water to the Oman Power and Water Procurement Company SAOC under a 15-year power and water purchase agreement, starting on 1 April 2007. The first 360 MW phase is scheduled to start supplying power in April 2006 in order to meet the country’s rising power demand.

“This project, our second in Oman, consolidates our presence in a region with strong growth potential,” said Marc Josz, Tractebel EGI regional manager. “The region offers an investor-friendly environment characterized by long term power and water purchase contracts with US dollar secured returns.”

Russian reforms face six month delay

Russian prime minister Mikhail Fradkov has announced that the decision on separating and auctioning the country’s wholesale generating companies (OGKs) will be made at the end of 2004. The move will effectively delay the country’s power industry reform plans by six months.

The decision on how to structure and auction the OGKs was expected at the end of June, with the first auction taking place in early 2005. The delay could result in a delay in the launch of the fully liberalized wholesale market, which is due to begin in mid-2006.

Under Russia’s restructuring plans, ten OGKs are to be established comprising the country’s federal power plants. At least six of the companies are to be auctioned off to introduce private capital and competition into the industry.

Enel buys Romanian discos

Italian power company Enel and the Romanian Privatization Office (OPSPI) have signed an agreement finalizing negotiations for the acquisition by Enel of a 51 per cent stake in two Romanian distribution companies. Enel has agreed to pay g112m ($135m) for the two companies – Electrica Banat and Electrica Dobrogea.

Marubeni is top bidder

The Japanese-US alliance of Marubeni Corporation and BPU Ventures is the top bidder for Abu Dhabi’s fifth independent water and power project (IWPP), the Taweelah B/C plant. The bids were opened by the Abu Dhabi Water and Electricity Authority (ADWEA) in mid-July, and a final selection will be made in the autumn.

Marubeni and BPU bid $1.69bn for the project, while a consortium of International Power and Tractebel bid $1.59bn. France’s Total and its partner Tokyo Electric Power Co. bid $1.33bn. The selected developer will take over the existing Taweelah B power and desalination plant, which has a capacity of 1000 MW and 409m l/day of water and expand it by adding 1000 MW and 296m l/day.

Fichtner of Germany is the technical advisor for the project while HSBC is the financial advisor.

Jordanian pipeline closes finance

The Jordanian gas transportation pipeline project has achieved financial close. The project is the second phase of the $1bn Arab gas pipeline project that aims to transport gas from Egypt to Jordan, Syria, Lebanon and eventually onto Europe.

A syndicate of 19 regional banks and financial institutions are lending a total of $160m for the project, led by the Housing Bank for Trade & Finance in Jordan.

Bulgaria moves forward with Belene

The Bulgarian government has said that it will launch two tenders to select a contractor and a financial advisor for completion of the Belene nuclear power plant. The move means that the half-completed project could be operational by 2010.

Three multi-national consortiums have expressed an interest in the project and will be invited to submit bids by late autumn. The economy, finance and energy ministers will examine the bids and hope to sign contracts in early 2005.

The cost of the project is likely to exceed g1.6bn ($1.9bn). Of that, half will be spent by 2010, when the first of the plant’s nuclear reactors comes into operation.

The European Bank for Reconstruction and Develop-ment has approved a $42m loan to modernize and improve safety at two nuclear reactors being built by Energoatom in the Ukraine: Khmelnitsky unit 2 (K2) and Rivne unit 4 (R4).