News digest

Albania: The European Bank for Reconstruction and Development is lending Albania’s state-owned power utility KESH g40m ($48.6m) to help improve power supplies in the country. The 15-year loan will be used to construct a new 135 MW oil fired power plant in south west Albania.

Egypt: Austria’s VA Tech Transmission & Distribution has won a turnkey contract worth g7.3m ($8.9m) from the Egyptian Electricity Transmission Company (EETC) for the Tahrir Badr AIS substation project.

Egypt: Russia’s Power Machines Group has opened a subsidiary in Cairo to manage its work in the modernization of Egypt’s Aswan Dam power station. The project, which is being implemented in co-operation with Germany’s Voith Siemens, is due to be completed by 2010.

Hungary: Pannonpower Group has opened a 50 MW biomass power generating block at its Pecs power plant, following a refit which will see wood chips replacing coal as the fuel source. The biomass block was built in a $44m investment financed by OTC Bank utilising the Kyoto JI mechanism.

Iraq: Germany’s Elbe Maschinenbau has signed an EPC contract with Iraq’s Ministry of Electricity for three new power plants to be built by the end of 2005. The contract calls for the construction of a 550 MW plant and a 110 MW facility, both operated with heavy fuel oil with an option for a further 240 MW unit.

Kuwait: The first unit of the Az Zour power plant in Kuwait has been connected to the grid with the second and third units scheduled to come on line during September. Siemens Power Generation is building the plant which will have a total capacity of around 1000 MW.

Oman: A strong initial response has been reported in respect of the Initial Public Offering (IPO) for a 35 per cent stake in Oman’s Al Kamil Power Company, currently owned by International Power (IP). The plant is Oman’s first BOO scheme and IP has a contractual commitment to the Omani government to sell the minority stake.

Oman: The Oman Oil Company has appointed SNC Lavalin as consultant for a $425m, 700 MW combined cycle captive power plant at an aluminium smelter plant in Oman. Bechtel, Hatch and SNC Lavalin have expressed interest in carrying out the EPC phase.

Qatar: Areva’s Transmission and Distribution division has won a g20m ($24.3m) contract to construct an electricity distribution management system which will manage the state’s 11kV/415v electricity distribution network.

EBRD takes stake in Polish power privatization

The European Bank for Reconstruction and Development (ERBD) is the prime backer in the privatization of Poland’s Zespol Elektro-cieplowni Poznan (ZEC), the combined heat and power plant in Poznan.

Via its Polish affiliates Dalkia Termika and PEC Poznan, the ERBD is buying an 85 per cent stake in the company for PLN350m ($96m).

Dalkia Termika acquired Poznan’s district heating network operator in 2002, which is ZEC’s biggest customer. With the takeover of ZEC, Dalkia Termika will look to integrate the production and distribution of heat into one business unit.

Separately, the UN Mission in Kosovo (UNMIK) unveiled plans to build a power plant and lignite mine in Kosovo, with the ERBD sited as potential backers. The estimated cost of the project is between g500m and g1bn ($609.8m-$1.2bn). Kosovo has large quantities of quality lignite and the new plant is intended to address the frequent power outages and assist in the country’s economic development.

Tractebel wins Al Ezzel IPP project

Bahrain’s Ministry of Finance and National Economy has awarded a contract to design, build, own, operate and maintain the Al Ezzel independent power producer project. The 1000 MW combined cycle plant, which will be owned by Al Ezzel Power Company, is the first IPP project in Bahrain.

The contract for the $500m project was awarded to a consortium of Tractebel EGI, a business division of Suez, and its partner Gulf Investment Corporation. The plant will be located to the south of the existing Hidd power and water station and will sell electricity to the Ministry of Electricity and Water under a 20-year power purchase agreement commencing on May 1, 2007.

The long-awaited request for proposal for Saudi Arabia’s Shoaiba independent power and water project have been sent out to developers. The 11 pre-qualified groups have until January 8, 2005 to submit proposals.

Georgia plans hydro plant sale

The Georgian Electricity Ministry has announced that five of its hydroelectric power stations in the west of the country are to be privatized over the next 18 months. The five plants, which are Rioni, Shaori, Lajanuri, Gumati and Dzevruli, have a total capacity of about 250 MW.

An earlier plan to privatize these plants two years ago was dropped as a result of concerns expressed by the World Bank that the poor technical and financial condition of the plants would limit the revenue generated by the sales. USAID has now agreed to provide a grant of $15m to carry out urgent repairs at the five hydropower plants in the run up to privatization. The Energy Ministry estimates that the current value of the plants would not exceed $20-$25m.

Rebids invited for Slovak generator

Complications arising from the bidding for a two-thirds stake in dominant Slovakian generator Slovenske Elektrarne (SE) has led to the four interested parties being asked to resubmit binding bids. Assumptions made by some bidders make bids hard to compare, according to a steering committee.

Italian power group Enel was reported to have submitted the highest bid but this was highly qualified by the assets and contracts it sought to exclude.

Inter RAO UES, a subsidiary of Russia’s UES (60 per cent) and Rosenergoatom (40 per cent) has also submitted a bid, although the fact that Slovakia has no borders with Russia limits the scope for synergies between SE’s operations and the Russian power network.

Norsk Hydro is also reported to be interested in becoming a financial partner in the InterRAO consortium, if it wins the tender with Germany’s E.ON.

Austria’s Verbund has also sumbitted a bid for SE.

Nordic wins Estonia contract

Nordic Windpower has won a contract to supply one of its twin-bladed Nordic 1000 turbines to the Estonian island of Saaremaa. The turbine will be manufactured in Scotland. It is capable of producing 1000 kW, sufficient to power up to 500 homes on the island which has a population of nearly 30 000.

Nordic signed the contract with OU Beta Est Holdings and has the support of the State Chancellery of Estonia, with part funding from the Swedish government. The project was initiated by the Estonian Wind Power Association as a demonstration project in order to assist Estonia fulfil its renewable energy targets for the year 2010.

Jaan Tepp, managing director of OU Beta Est Holdings said, “We chose Nordic’s technology because it is cost effective and reliable. It is the most practical unit for undeveloped renewable energy markets in East and Central Europe which have low feed-in tariffs and weak electrical grids.”