Kuwait has announced the successful completion of the construction phase of its $1.7-billion Azzour North One, the first independently-owned utility plant in the country, and has now started the launch of its full commercial operation, said a report.

The Azzour North One project is the first PPP (public private partnership) project to be tendered and the first to be completed, reported Kuwait Times, citing its owner and operator Shamal Azzour Al Oula.

Shamal Azzour Al Oula is 40 per cent owned by a private consortium comprising Engie (formerly GDF Suez), Sumitomo Corporation and AH Al Sagar and Brothers, while the remaining 60 per cent stake is owned by the government through Kuwait Authority for Partnership Projects (KAPP) which has 50 per cent share along with the Kuwait Investment Authority (KIA) and the Public Institution for Social Security with five per cent each.

As per the deal, the government is mandated to sell 50 per cent of the total ownership through an Initial Public Offering (IPO) to Kuwaiti citizens once the construction is completed. The government will retain 10 per cent stake following the IPO.

The power and treated water produced from the plant will be entirely supplied to the country’s national power and water grid operated by Kuwait's Ministry of Electricity and Water (MEW) under a 40-year long-term energy conversion and water purchase agreement.

Engie and Sumitomo will undertake the operation and maintenance of the plant on an equal share basis, said the report.

The construction of the power plant along with a desalination plant forms the first phase of the IWPP.

KAPP has invited main contract bids for the Phase Two of the Azzour North IWPP. The project aims at producing 1,800 MW of electricity and 464,100 cu m a day of desalinated water.

Speaking at a ceremony to mark the official launch of plant operations yesterday (November 30), Shamal Azzour Al Oula said the project was completed on schedule and on budget. Work on the mega project began in December 2013.

The plant is now capable of generating 10 per cent of Kuwait’s power requirements at peak capacity (1,539 MW) and 20 per cent of water generation (107 million gallons per day), said the Kuwait Times report.

The plant is being fuelled by a blend of local gas and imported LNG. The combined facility of power and water generation is Kuwait’s cleanest and most efficient source of electricity.

The plant is the first stage of the country’s plan to significantly increase capacity over the coming years, and falls within a larger effort to meet an anticipated peak demand of 25 gigawatts (GW) by 2025.

The overall IWPP is expected to be developed over five phases, for a total capacity of 4,800 MW of electricity and approximately 280 million gallons per day of desalinated water to be tendered over a period of four to six years to meet a projected rapid increase in electricity demand, which is expected to increase at a high rate of 7.6 per cent per annum until 2020 against the backdrop of fast economic growth.