What advantages does the PPP model bring?
The private sector brings high levels of efficiency and latest business practices, and Kuwait benefits from the partnering and collaboration with the international associates, ENGIE, and Sumitomo. Partnering with the private sector also provides a profit-oriented approach whilst emphasizing and implementing the highest levels of safety. Therefore, inviting foreign investors helps Kuwait to raise the bar in many aspects. On this project, our contract lasts for 40 years, making us an integral part of the Kuwaiti infrastructure. We built, operate, and will eventually hand over the plant to the state. We intend to provide power and water to Kuwait as well as value to our shareholders before the plant is transferred. Shamal is not just a commercial investment; we have approached Kuwait Institute for Scientific Research (KISR) and Kuwait University to sponsor urban greenery projects and marine ecology projects. The new plant is certainly beneficial for the country as it uses modern technology and is extremely efficient and reliable. The plant was constructed on time and under budget, which is exceptional in the region. We have completed two years of successful commercial operations and recently finished the warranty period. We produce the cheapest energy in Kuwait. Shamal Az-Zour uses gas, which we consume more efficiently and with significantly lower emissions.
What collaboration between your shareholders guarantees the success of Shamal Az-Zour?
Firstly, we have the strength and depth of ENGIE, which has interests in more than 23 power and water production facilities in the region. This brings to the consortium a shareholder with a proven construction and operational track record. Second, Sumitomo also has a number of assets throughout the UAE and internationally. In addition, the company has a strong financial capability and brings the JBIC financing. There is an excellent track record of Sumitomo and ENGIE working together on other plants in the Gulf, so the relationship and understanding between both organizations has always been positive. There is also the strength of the local partner, Al Sagar, a well-known engineering company. It is, therefore, the perfect mix of a strong local partner and two experienced international utility companies.
How do you lower your costs of generation while reducing emissions?
In the power industry, as in many industries there are economies of scale. The plant itself provides over 1,500MW of power and over 100 million gallons of water per day. Operating and maintaining the plant in a professional manner using the latest control technology ensures that we sustain high levels of efficiency and availability. We have efficient combustion systems using the latest technology from General Electric, which reduces our CO2 emissions. The private sector manages cost by having highly trained and skilled engineers and utilizing synergies in procurement activities. We ask our teams to work within an operational excellence framework and promote an innovation culture. We have 120 staff for 1,530MW and 107 million gallons of water per day. The equivalent public-owned assets would have five times that number of people. In the winter, we currently provide 27% of Kuwait's power and 20% of Kuwait's water. This demonstrates the trust the Ministry of Electricity and Water has in us in terms of reliability and availability.
What are your expectations for the year ahead?
Within Kuwait and particularly the utility sector, I am extremely positive. Hopefully, the Phase II and Phase III tenders will be issued, as we are keen to be involved. We recently completed the winter period of maintenance outages in advance of the summer period. Demand in Kuwait increases dramatically from 5,000MW in winter to over 18,000MW in the summer. The plant has been performing well and is in an optimum condition, so I look forward to a positive seven months of summer operations. We intend to continue to remain the most reliable and the cheapest form of power and water for the Ministry of Electricity and Water.