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Saudi Arabia's independent power project in Rabigh makes rapid progress

By KHALIL HANWARE RABIGH: New and ongoing projects undertaken by Saudi Electricity Co. ( SEC ) will help match the rapid growth of the Kingdom's economy, its President & CEO Ali S. Al-Barrak said.

"We have long-term and short-term plans to meet future power demand as we have forecast for the next 20 years and confirmed demand for five years," he said, as he visited the Kingdom's landmark Independent Power Project in Rabigh to assess its progress.

With $2.5 billion (SR9.37 billion) of funding, the project is being developed as a new power plant with a net capacity of around 1,204 MW at Reference Site Conditions (RSC) and associated facilities located in Rabigh, about 130 km north of Jeddah.

The first phase of the project will start producing 604 MW in July this year.

The Rabigh Independent Power Project (IPP) will provide power to the SEC under a 20-year Power Purchase Agreement (PPA).

Several board members of Rabigh Electricity Company (RABEC) accompanied Al-Barrak on Wednesday.

Saudi Arabia is trying to keep up with its growing power demand, which is rising 7 to 8 percent annually.

SEC , which has an installed capacity of 50,000 MW, plans to beef up its capacity to at least 80,000 MW by 2020.

SEC has earlier announced plans to invest over SR300 billion in generation, transmission, and distribution projects in the next 10 years.

Al-Barrak is confident that SEC will meet the Kingdom's future electricity demand and keep up with rapid economic development. He said: " SEC has already decided on which projects will be implemented every year - which will be IPP and which will be EPC ... to be built by SEC or developers."

He added: "We have three projects. The Rabigh project is the first one and we have already signed two more projects."

Bids will be invited for two more projects this year and next year, he said.

Al-Barrak explained that SEC had undertaken massive projects to meet the Kingdom's growing power needs.

RABEC Chairman Mohammad A. Abunayyan and Abdulaziz Al-Mahdi, executive managing officer (EMO), welcomed Al-Barrak and the delegation and took them on a site tour to highlight the key aspects of Rabigh IPP.

Abunayyan pointed out that the visit of Al-Barrak was "nothing but explicit clear proof of SEC 's approach to fulfilling its responsibility regarding paying great attention to the progress of such an important project."

The Rabigh IPP is a flagship project launched by SEC in 2009 structured on a concession or utility outsourcing contract model financed using a limited recourse, project finance framework.

This project, which was awarded to the consortium of ACWA Power International and the Korean Electric Power Company (KEPCO) who combined own an 80 percent share of the project and 20 percent owned by SEC .

This is the first step in SEC 's plan to open up ownership and operations to the private sector to in turn support it to meet the rapidly increasing demand for power in Saudi Arabia between 2009 and 2020.

It is also the first project in the Middle East based on Chinese technology and implemented by a Chinese contractor, the consortium of Dong Fang Electric Corporation and SEPCO III.

Al-Mahdi added: "We are proceeding at steady paces toward completing all the project stages, and here we are witnessing today the benefit of selecting a Chinese contractor and technology that 84 percent of the project completed up to date."

He also stressed that all standard tests were passed successfully.

"We look forward to completing operation stage of the first unit very soon. All these would not have been accomplished without, firstly, SEC 's guidance and careful follow-up," Al-Mahdi pointed out.

Construction works of Rabigh IPP commenced in July 2009 and the company has been continuously working on the project for the past two and a half years.

Al-Mahdi pointed out that Rabigh IPP recently completed 23 million working hours without any injuries or lost time occurred so far.

The Rabigh IPP project has also won various awards.

Rabigh IPP was named as the 2009 Middle East Power Deal of the Year by Project Finance International (PFI), a Thomson Reuters publication and by Euromoney.

The project will be completed in April 2013 to generate a total of 1,204 MW.

© Arab News 2012