Al Ezzel Power Company (EPC) has completed a US$380mn limited-recourse financing for the construction of the first ever private power generation plant in Bahrain.
The US$500mn plant, in Hidd Industrial Area, and being built by EPC, will produce more than 950MW of power per day which will be made available to the ministry of electricity and water.
EPC is equally owned by Belgian-Gulf consortium Tractebel EGI (T-EGI), a division of the Suez Group, and by the Gulf Investment Corporation (GIC). The plant is being designed by T-EGI and GIC.
The loan agreements were signed with a consortium of regional and international banks, led by HSBC and Société Générale and including ANZ, Bayerische Landesbank, Calyon, Gulf International Bank, ING, Mashreqbank, Mizuho, Royal Bank of Scotland and Standard Chartered.
At the same time, EPC also announced the signing of the engineering, procurement and construction contract with Siemens.
The project will consist of a combined-cycle gas-turbine plant. “The first phase, with a production capacity of 470MW will be ready in April 2006 and will reach its full capacity of 950MW by mid 2007,” says GIC chief executive officer Hisham Al Razzouki.
Bahrain had entered into a 20-year power purchase agreement (PPA) last July 31 with GIC and T-EGI following a competitive tendering process. The CEO said investing in the project is in line with their strategic emphasis on major value-added projects, and power is one such sector.
This is EPC’s sixth investment in Bahrain, and the firm is in the advanced stages of developing further investments there.
A ministry official said the project was expected to create around 100 jobs initially, and eventually that would go up to around 500.
He said the new jobs would not be at the expense of ministry staff jobs, adding that the prices of electricity generated would be reasonable for consumers. The current total production of electricity in Bahrain is around 1,800MW while peak demand last summer reached 1,535MW.
“The production capacity will be enough to meet the demand for two years, and Bahrain may experience a power shortage by 2006. However, the situation will be eased when the new plant comes on stream as part of the government’s privatisation programme,” he added.