News digest

Bahrain: The Ministry of Finance and National Economy is seeking expressions of interest for the construction of a $1.15bn, 1000 MWe independent power plant to be built on reclaimed land at the Hidd complex. The first phase of the project, consisting of 400 MWe, is due to come on stream by 2006.

Bulgaria: The Ministry of Environment and Water has started the prequalification process for a g80m ($100m) project for the delivery, installation and commissioning of flue gas desulphurization systems for the Maritsa 5 and 6 plants.

Czech Republic: Electricity consumption in the Czech Republic increased by more than two per cent year-on-year to a record level of 54.8 TWh in 2003. Electricity production grew nine per cent to 83.2 TWh, 75 per cent of which was supplied by CEZ.

Kenya: The World Bank has given Kenya a KES3.5bn ($45.8m) loan to strengthen power transmission and distribution infrastructure. The project will help to reduce the frequency of blackouts and increase the number of people with access to electricity in urban centres from 40 to 60 per cent.

Oman: India’s National Thermal Power Corporation (NTPC) and Bharat Heavy Electricals Ltd. (BHEL) have appointed Ernst & Young as their exclusive financial advisor for their upcoming integrated power and desalination plant at Sohar, Oman. The $1bn plant will produce 273m l/day of water and 450 MWe.

Poland: Morskie Elektrownie Wiatrowe (MEW) has contracted AWS Scientific of the USA to conduct a feasibility study into the possible construction of a $450m, 250 MW offshore wind farm to be located at Slupsk Shoals in the Baltic Sea. The wind farm would consist of 100 wind turbines and would start up in 2007.

Tanzania: CDC Globeleq has announced that FMO, the Dutch Development Finance Company, has purchased a stake in the Songas natural gas processing, transportation and power generation project in Tanzania for $14.4m. The project comprises a gas processing plant, a 225 km pipeline and a 112 MW power plant.

UAE: The Abu Dhabi Union Water & Electricity Company (OWEC) has invited expressions of interest for an equity stake in its power generation and water desalination project at Qidfa in Fujairah, UAE. UWEC is seeking a developer to invest in the existing plant and to participate in a planned expansion project.

Ukraine: The Ukrainian State Property Fund has cancelled plans to partly privatize the country’s regional utilities following a presidential decree on the consolidation of energy assets.

IP closes Saudi financing

International Power and Saudi Oger have announced that they have successfully completed the financing for the Saudi Aramco cogeneration plants. The four cogeneration projects have a combined capacity of 1074 MW and will supply power and steam to Saudi Aramco, the national oil company of Saudi Arabia.

The financing comprises a non-recourse $510m facility that has a 17 year term. Total equity investment in the projects amounts to $130m, of which $78m will be invested by International Power and $52m by Saudi Oger. Under an agreement signed in December 2003, International Power and Saudi Oger will develop, own and operate the four plants.

The four projects will be located in the Eastern Province of Saudi Arabia. Saudi Aramco will supply the plants with

natural gas fuel, and will use electricity and steam from them for consumption in its processing plants under 20 year energy conversion agreements.

Engineering, procurement and construction will be carried out by Mitsui & Co. of Japan and Hyundai Heavy Industries of Korea. Lead arrangers of the financing were Arab National Bank, Banque Saudi Fransi and Samba Financial Group.

Enel wins Russian power plant management contract

Italy’s Enel SpA and Russian private investment group ESN have won a contract to manage the North West thermal power plant (NWTPP) in St. Petersburg, Russia. The contract is thought to be the first of its kind in Russia won by a non-Russian company.

Under the contract, Enel ESN Energo LLC (EEE) – a 50:50 joint venture between Enel and ESN – will manage NWTPP for three years, with the possibility of a one-year extension, and will act as its sole executive body. EEE will also oversee the completion of a second 450 MW unit at the power plant and a heating pipeline linking the plant to St. Petersburg.

Enel’s entrance into Russia may give other Western utilities the confidence to enter the Russian power market as it gradually liberalizes.

Edison sells Turkish unit

Italy’s Edison has sold its controlling interest in a Turkish power plant to a unit of Turkish conglomerate Koc Holding for a total consideration of g53.2m ($6.2m). The sale is in line with Edison’s plan to divest non-strategic assets outside Italy.

The sale price was g10.7m, and also includes g4m of debt.

Fluor Corporation awarded Iraq reconstruction contract

The US Army Corps of Engineers has awarded US engineering firm Fluor Corporation three separate task orders worth $154m for electrical power restoration work in Iraq.

The task orders call for Fluor to rehabilitate multiple power generation facilities in Baghdad, reconstruct a power transmission line in northern Iraq and restore a water intake facility at a thermal power plant in southern Iraq. Under a previous Corps of Engineers contract issued in April 2003, Fluor is continuing to help repair central Iraq’s electrical infrastructure.

Russia delays genco decision

Further discussions on the creation of Russia’s new wholesale generating companies (OGKs) was delayed in February following President Vladimir Putin’s decision to sack his government. The creation of ten OGKs and up to 20 regional generating companies – TGKs – is a central part of Russia’s plans to reform its power industry.

A key issue in establishing the OGKs is how shares in these companies will be distributed and auctioned. The first auction of an OGK is scheduled for late this year, although early 2005 now appears to be a more realistic date.

A number of key strategic shareholders in Russia’s regional power utilities (energos) have submitted their views on recent proposals for the creation of TGKs.

Areva wins Algeria contract

Areva’s transmission and distribution (T&D) division has been awarded two turnkey contracts by Algerian utility Sonelgaz totalling more than g32m.

The contracts are part of the country’s on-going electrical network improvement programme and are the latest of four won in Algeria by Areva in the last 18 months.