LET’S DO IT TOGETHER
Public-private partnerships are coming to the rescue in Kuwait's renewable energy sector.
Kuwait may be rich in oil resources, but the country's decision-makers are farsighted enough to take renewable energy seriously. Indeed, Kuwait has been keen on sustainable energy since as early as the 1970s, when the concept meant little in the Middle East. Kuwait has not lost interest in renewable energy over the years, and the country's Ministry of Electricity and Water has set itself an ambitious target: by 2030, renewable sources should account for at least 15% of the nation's overall power generation.
Although there is still a long way to go, discussions about renewable energy are coming to the forefront, raising awareness in the society. Kuwait has realized the climactic and economic threats posed by fossil fuels and is diversifying its energy resources. Given Kuwait's geography, solar will be the most viable option as the country receives its fair share of sunlight throughout the year.
The inauguration of the Shagaya Renewable Energy Park, which hosts the country's first concentrated solar power plant (CSP), was certainly a milestone in this regard. The country's first CSP project, with the capacity of 50MW, was developed by Kuwait Institute for Scientific Research (KISR) and carried out by a Kuwaiti-Spanish consortium. However, this initial phase will be only a starting point, as much as USD8 billion of investment is needed if Kuwait is to achieve its lofty goals for 2030.
The financing of green energy projects has always been an issue as the returns may not be as immediate as the private sector is used to. The public sector, on the other hand, already has enough on its plate, especially in the Gulf region where public sectors are traditionally oversized and involve a number of ongoing affairs.
The public-private partnership model, which has been employed in other countries with promising results, can come to the rescue. PPPs have proven to be particularly fruitful in the infrastructure and energy sectors. According to AIG, an American finance corporation, “The US is poised to become the largest public-private partnership market in the world for infrastructure projects."
Kuwait can benefit from PPPs, too; the country has already launched the Kuwait Authority for Partnership Projects (KAPP) to “promotes collaboration between the public and private sectors to develop quality infrastructure and services for Kuwaiti citizens." KAPP's focus on the infrastructure sector is well placed, as traditionally it benefits the least from the private sector's participation in the Middle East.
PPPs can incentivize the country's prosperous private sector to take a more active role, while giving the government a say in the management of the country's critical infrastructure projects. Regardless of the capital that can be injected into Kuwait's energy projects by the private sector, the private sector has a reputation for cost-effectiveness, efficiency, and competitiveness everywhere in the world.
Kuwait's Public Private Partnership Law came into effect in 2008, paving the way for success stories such as Al-Zour North One Power Plant, which in 2018 celebrated its second year of service. As the nation's first PPP power plant, Al-Zour North One is capable of satisfying over 27% of Kuwait's demands for electricity when running at maximum capacity.
In light of this success, KAPP is preparing itself for more similar enterprises in the field of energy by inviting bidders to hand in their proposals for two more projects under the PPP model. KAPP has invited Kuwaiti and foreign companies to bid for the construction of the first phase of Al-Khiran Water and Power Plant as well as the second and third phases of Az-Zour North.
One of the biggest tenders in the history of Kuwait, however, was announced in 2018 for a renewable energy project worth USD1.2 billion. The Al Dibdibah solar power plant's 1.5GW output is expected to replace over 5 million barrels of oil each year. Interestingly enough, this project is launched by none other than the Kuwait National Petroleum Company (KNPC). The project's full capacity will be reached in 25 years and in 300-MW blocks. The future of Al Dibdibah solar plant and the Shagaya Renewable Energy Park, which houses it, will also determine the future of public-private initiatives in Kuwait.
LET’S DO IT TOGETHER
TABLE OF CONTENTS
Interview
Adel Abdul Wahab Al-Majed , Chairman, Kuwait Banking Association (KBA)
Through a broad array of information, specialized committees, staff expertise, and other resources, KBA supports Kuwait's banks as they perform their critical role in energizing the economy and helping communities thrive.
read articleInterview
Sheikh Dr. Meshaal Jaber Al-Ahmed Al-Sabah, Director General, Kuwait Direct Investment Promotion Authority (KDIPA)
KDIPA adopts a proactive approach to attract value-added direct investments supported by an integrated promotional strategy serving Kuwait's developmental goals in line with its National Vision 2035.
read articleCommuniqué
Legal Reform and Infrastructure Projects Spell Opportunity for Foreign Investors
Along with the introduction and modernization of new laws and regulations, the vision of His Highness Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah to transform Kuwait into an international center for commerce and industry by 2035 is already being implemented through Kuwait's National Development Plan. Coupled with the promulgation of progressive FDI regulations, these new opportunities spell positive news for foreign companies looking to conduct business in Kuwait.
read articleFocus: Developing connectivity
Connecting the Dots
Today, connectivity is hardly indispensible for individuals and the companies where they work. Kuwait's smart cities, considered elsewhere in the book, will thrive on it, and meanwhile the nation continues to register notable business deals from the informatics sector.
read articleInterview
Khalid Abbas , Country Manager-Kuwait, Unilever
Contributing to the improved health and wellbeing of communities and reducing environmental footprint are key priorities for Unilever, which is committed to improving the health and wellbeing of up to 1 billion people globally by 2020.
read articleInterview
Mohammed Yousif Soud Al-Sabah , Board Chairman & Director, Public Authority of Agriculture Affairs and Fish Resources (PAAAFR)
PAAAFR has adapted a package of policies to face challenges inherent to deserts, hot climate, and water scarcity, bringing Kuwait closer to achieving national food security, one step at a time.
read articleInterview
Yang Chunsen, Vice President/ Chief Representative, China State Construction Engineering Corporation Middle East (CSCME) Kuwait
CSCME is a technology-driven company that leverages its R&D and long-standing partnership with the government to increase its participation in the future development of Kuwait.
read article
