Preferred bidder for Az Zour project in Kuwait

Following financial close, the consortium will construct a gas-fired combined cycle power plant of at least 1,500MW and an associated water desalination plant with a capacity of 102 to 107 MIGD (464 to 486 thousand m³/day). All of the plant’s output will be purchased by the Kuwait Ministry of Electricity and Water under a 40-year long-term Energy Conversion and Water Purchase Agreement (ECWPA). The plant is expected to start commercial operation in 2015.

The project is expected to be owned 10% by Kuwaiti public entities, 50% by Kuwaiti nationals (via an Initial Public Offering) and 40% by the consortium, which is made up of International Power (17.5%), Sumitomo (17.5%) and A.H. Al Sagar & Brothers (5%).

The total project cost will be funded by a mix of project finance debt and equity in an approximate 80:20 ratio.

In addition, International Power and Sumitomo anticipate establishing (on a 50:50 basis) the operation & maintenance (O&M) company for the Az Zour plant. The EPC contractors will be Hyundai Heavy Industries and SIDEM.

Notes to Editors

In 2010 peak demand for electricity in Kuwait was circa 10.5GW and demand growth of 3% to 4% is expected in the next five years.

It is anticipated that the Government entities will distribute a 50% share of the Az Zour project to Kuwaiti citizens through an Initial Public Offering (IPO), reducing the Government share in the project to not less than 10%.

In the Middle East, International Power has a direct equity interest in more than 25GW power capacity and almost 4.8 million m³/day of desalination capacity in operation and under construction. In the Gulf Cooperation Council countries, it is the leading operating independent power and desalinated water producer, with over 15 years of experience.