the publictransportationsector. respectively areintegralpartofKuwait’splantoupgrade network, withprojectvaluesofUSD The developmentofanationalrailwayandmetro likely topromotegrowthofprojectfinanceinKuwait. Private sectorinvolvementininfrastructureprojectsis desalination capacity. and drivedemandforexpansionestablishmentofnew expected toputincreasedpressureondesalinationfacilities Scarcity ofnaturalgroundwaterresourcesinKuwaitis renewable sourcesby2020. at least10%ofitselectricity(orover2,000MW)from energy tomeetgrowingdemand.Kuwaitaimsgenerate The KuwaitGovernmentisconsideringalternativesourcesof leading tolongtermopportunitiesforforeigninvestors. 2025. Theprivatesectorisexpectedtoplayamajorrole, electricity productioncapacitytargetsof25,000MWsetfor 25 Bntomeet the investment ofapproximatelyUSD The MinistryofElectricityandWater(MEW)anticipatesan service providers. specialized globalconstructioncontractors,operatorsand are planned,presentingconsiderableopportunitiesfor A numberofportexpansionandnewconstructionprojects FUNDING –PROJECTFINANCE RAIL TRANSPORTINFRASTRUCTURE MARINE TRANSPORTINFRASTRUCTURE DESALINATION PLANT POWER GENERATION -RENEWABLE POWER GENERATION –FUELBASED SECTOR OVERVIEW facilities atparwithglobalstandards andbenchmarks. provide specializedfacilitiesmanagement(FM)servicestomaintainKuwait’s airport Kuwait’s initiativestopositionitselfasacommercial hub.There existspotentialto The plannedupgradestoKuwait’s aviationinfrastructure are expectedtosupport 2.1: Infrastructure opportunities for foreign andlocalinvestors Government’s infrastructure planprovide significant Power andtransportbeingthe mainfocusareas ofthe 10 BnandUSD 7 Bn USD Project value USD Fuel-based power production capacity System to increase by over Kuwait National Rail Road Project value 2 -Keysectorsfor opportunities (tendering 10 25 Mn Bn in 10,000 201 6 ) MW by 2025
Investing in Kuwait: A guide for Investment Opportunities in Kuwait 12 13 Investing in Kuwait: A guide for Investment Opportunities in Kuwait OPPORTUNITYOVERVIEW Source: KuwaitPower Report,BMI,GCCEnergySector – QuarterlyReview,Zawyaprojects,MEW increasing demandfrom consumers. projects tostrengthen Kuwait’s electricityandwatersupply situationinorder tomeetthe generation inKuwait.TheMinistryofElectricityandWater hasannouncedseverallarge Conventional fossilfuelsare expectedtoremain thedominantfuelmixforelectricity investors toparticipateinKuwait’s powersector. participation throughthePPPmodelcreatingsignificantopportunitiesforinternational meet thisexpectedincreaseinpowerdemand,theGovernmentisinvitingprivatesector isthe sole producerGovernment anddistributor ofpowerinKuwait.However, inorder to the peakloaddemandof1 Demand forpowerinKuwaitisexpectedtogrowatarateof 2.1.1: PowerPlant-Fuelbased 201 international firms. to providesubstantialbusiness opportunitiesforlocaland and watercapacityinthecountry. Theseprojectsarelikely including throughthePPProute,tostrengthenelectricity The MEWhasrecentlyannouncedseveralpowerprojects, power until2015. next twotothreeyearscatergrowthindemandfor approximately USD2.5Bnofinvestmentproposedoverthe plants inKuwaitisprojectedatUSD25Bnby2025with demand. Theestimatedmarketsizeoffuel-basedpower MW ofpower Kuwait’s powergenerationcapacitystoodat1 WKH333 3URSRVHG Kuwait Hybrid Kuwait Kuwait Kuwait Kuwait Kuwait North IWPP - Phase 1 North IWPP - Phase 2 North IWPP - Phase 3 North IWPP - Phase 4 4 anditisestimatedthatanadditionalcapacityof Power Plant PRGHO KAPP
KAPP KAPP KAPP KAPP KAPP SRZHU - Al Khiran IWPP - Al Zour - Al Zour - Al Zour - Al Zour - Al Abdaliya is planned SODQWV WKURXJK by2025tomeettheexpected 3ODQQHG (desalination) 2,500 280 g/day 800 MW (power) and 50 million 1,000 million g/day 1,500 million g/day 1,500 MW 2 MW and 125 MW (desalination) MW MW , FDSDFLW\ 8 00 (power) (power) (desalination) (desalination) MW 5,990 and million and in 201 MWin 102 102 12 g/d , 170 3
toreach25,000MWby2025.Currently,the • • • planned developmentoftheindustrialsector. infrastructure projectsbeingundertakeninthecountryand Kuwait’s growingeconomycombinedwithlargescale Demand forelectricityisexpectedtogrowasaresultof has ledtohighelectricityconsumption. Rapid populationgrowthandsubsidizedelectricityprices cooling systems. occurring duringthesummermonthsduetoheavyuseof drivers forpowerusage,withpeakdemandusually Seasonal variationsandextremetemperaturesaremajor 5 . 7 % perannum(p.a)from international participationinthissector. and renewableenergysources,highlightingthescopefor Japanese firmstobuildpowerplantsusingalternativefuels MEW hasalsoreceivedoffersfromUS,Europeanand renewable energy. approximately 2,000MW,istargetedtobemetthrough 10% ofthetotalelectricitygenerationby2020,or OPPORTUNITYOVERVIEW Source: KuwaitPowerReport, BMI,GCCEnergySector–QuarterlyReview 2011,ZawyaProject,MEW,KAPP,KISRandKPMGAnalysis spends over USD conservation have led to high per capita consumption of power in Kuwait. The MEW R opportunities for foreign and local private investors to participate in this sector. The PPP model being adopted by the Government for large projects provide significant to oil would allow Kuwait to conserve its oil for other uses including for export purposes. upgrading the technologies used in power generation. Renewable energy as a substitute The MEW is planning to enhance the efficiency of installed power stations through per day to generate power. and uses an estimated average of 200,000 to 300,000 barrels of oil and refined products 2.1.2: PowerPlant–Renewable SCpata lAdly 280MW ISCC plant at Al-Abdaliya 2,000 MW Al Shaqaya Renewable Energy Project Project Name Renewable sectorprojects ising population, growing consumerism and limited awareness or incentives for energy 3.5 Bn per annum to meet the electricity requirements of the country Capacity • • • • generation. is anurgentneedtoexplorealternativemeansofpower As Kuwaithasbecomeanetimporterofnaturalgas,there targets ofatleast10%totalpowerproductionby2020. Kuwait Governmenthassetambitiousrenewableenergy energy canfreeupoilforothercommercialuses.The Shifting fromfuel-basedpowerplantstorenewable sources neededtogeneraterenewableenergy. taking advantageofabundantheat,windandsunlight support candriverenewableenergyinitiativesinKuwait, Increased environmentalawarenessandGovernment the saleofgreenhousegasesreductionunits. conserving/environmentally efficientplantstobenefitfrom greenhouse gasescanprovideanopportunityforenergy Ratification oftheKyotoprotocolforcontrolemission 2 -Keysectorsfor opportunities
Investing in Kuwait: A guide for Investment Opportunities in Kuwait 14 15 Investing in Kuwait: A guide for Investment Opportunities in Kuwait OPPORTUNITYOVERVIEW Source: ZawyaProject, MEW,Meed Estimates for water consumption in Kuwait, 2011-2020 in for waterconsumption Estimates Plant andSubiyaPlant,tonameafew. several projectstoaddnewcapacity,includingtheAl-ZourSouthPlant,DohaWest (from It isestimatedthatwaterconsumptioninKuwaitwillriseto780Mnimperialg/dby2020 Water andPowerPlants(IWPP)through the PPPmodel. all desalinationplantsinKuwait.However, the MEWisseekingtoestablishIntegrated driving Kuwaittoexpanditsdesalinationfacilities.Currently operates the Government Continuously increasing demandforwaterandscarcity ofnaturalwaterresources is 513 2.1.3: DesalinationPlant 2014 e 201 2015 2020
423 4 780 Shuwaikh Plant Shuaiba South Plant Doha East Plant Subiya Plant Doha West Plant Al Khiran IWPP Al-Zour North IWPP Plant 1 0
mn imperial gallons/day mn imperial gallons/day m mn imperial gallons/day 3 n
f i 410 m f p e r i a Mnimperialg/din201 l
g a l l o n s / d a y andKAPP Planned CapacityMnImperial g/d 50 36 42 100 110 125 276 3 approximately • • • • • have consumption. industrial sectorarelikelytoincreasedemandforwater Government-led initiativesforthedevelopmentof nearly highest intheworld.Percapitaconsumptionreached Kuwait’s per-capitaconsumptionofwaterisamongthe new desalinationfacilities. high levelsofwaterconsumption,drivingthedemandfor Population growthandrisingurbanization areleadingto source ofwatersupplyinKuwait. increases dependencyondesalinatedwaterastheprimary The scarcityofnaturalwaterresourcesinthecountry developers, operatorsandinvestors. represent potentialopportunitiesforinternational The plannedandupcomingdesalinationprojects 9.6 reach % y-o-y).Kuwaithasplanned 3 8 ,000 ed imperialgallonsin20 44,611 imperialgallonsby2015. 13 andisestimatedto OPPORTUNITYOVERVIEW high-growth marketforproject finance. Bn are expected tobeimplementedoverthenext1520years,presenting anattractive, models especiallyincore sectorssuchaspowerandwater. Projects worthoverUSD358 However, adoptingPPP thisscenario issettochangewiththeKuwaitGovernment in Kuwait. private sectorparticipationininfrastructure hashindered thegrowth ofproject finance 70 transactions wereintheutilitiessectorwithKSAandUnitedArabEmiratesattracting were fundedthroughprojectfinanceintheGCC.Over GCC- Project Finance Market GCC- ProjectFinance Source: Over aperiodofsixyears(200 2.1.4: Funding–Project Finance • • • 2012
20 2014 2010 24,928 2009 22,164
Mn 28,788 2013 29,601 21,745 2 banks andotherlongterminfrastructureinvestors. finance, presentingasizeableopportunityforinternational PPP modelisexpectedtogiveriseaneedforproject of theseprojectsunderthe Private sectorleddevelopment projects. PPP lawtocreatewiderprivatesectorownershipinlarge The KuwaitGovernmentispursuingprojectsunderthe significant constructionactivity. large infrastructureprojects,whichareexpectedtodrive The KuwaitDevelopmentPlanincludesanumberof 0 % oftotalprojectfinancelendingamongGCCcountries.Historically,thelack 11 , 3 9 IJGlobal 6 USD Mn USD Mn
USD USD Mn USD USD Mn Mn 9 -201 4 ), overUSD 148 2 -Keysectorsfor opportunities Bnofinfrastructureprojects 72 % oftheseprojectfinance
Investing in Kuwait: A guide for Investment Opportunities in Kuwait 16 17 Investing in Kuwait: A guide for Investment Opportunities in Kuwait Source: enterprises inKuwait. engineeringandconstruction considerable long-termpotentialforinternational development ofnewportsandexpansionworkontheexistingpresent led toseveralglobalcompaniesestablishingdirect regional presence. Theplanned The prioritizationofmarineinfrastructure developmentacross GCCcountrieshas Construction &Engineering 2.1.5: MarineTransport Infrastructure – OPPORTUNITYOVERVIEW project. need fornewmarinefacilities fortheAlZourrefinery construction andengineeringcompaniesinaddition equivalent units)in201 Port Shuaiba the redevelopmentofexistingthreeports-Shuwaikh, developing plansforsixadditionalportsinKuwaitbesides and Shuwaikhhadreached Kuwait’s portvolume oaPr Plans to develop Doha port to Doha Port Shuaiba Port could see further Shuaiba Port Newgantry cranes and yard Shuwaikh Port uatprsExpansionanddevelopment plans Bubiyan Island Mubarak Al KabirPort – Kuwait ports alone constitute Central Statisticalbureau, Zawyaand and Doha.Theconstruction s aUSD for thetwoprimaryportsofShuaiba 3 . Thegovernmentiscurrently
840,149 4 Bnopportunityformarine will TEUs. handling facilities. of warehousing and cargo ample space for the expansion as the port isendowed with handle more commercial cargo Shuaiba port. plan to redevelop and expand 2009 to drawup a master international consultants in Kuwait had invited investment in its infrastructure. terminals. allow larger ships to use the of the approach channel to to the deepening and widening are in the pipeline, in addition of enhanced computer systems stacking areas, and installation equipment, redevelopment of port is The development of thenew in 3 phases, once Middle EastEconomic Digest(MEED) have acapacity TEUs(Twenty-foot of expected Mubarak AlKabir to beexecuted completed of 2 Mn to the it • • • and otherconsumables. from vehicles,electronics,buildingmaterialstofoodstuff translates toadependencyonimportsforitemsranging The limitedlocalproductioncapacitiesacrosssectors and expansionofexistingports. for developmentofnewports,aswellthemaintenance The KuwaitGovernmenthasundertakenmajorinitiatives infrastructure. trade andsupportsthedevelopmentofKuwait’slocalport demographic balancepositivelyimpactsinternational Kuwait’s economicgrowthandfavorablesocio- OPPORTUNITYOVERVIEW disciplinary andintegratedserviceproviders. and metro networksinKuwait.Thesetwo are expectedtorequire specializedmulti- To isplanningthedevelopmentofrail address thesechallenges,theGovernment activity. additional movementofpeopleandgoodsarisingfrom higherdomesticeconomic infrastructure inorder tosupportKuwait’s increasing populationaswellto service Development Plan.There isaneedtosignificantlydevelopKuwait’s transport Transportation infrastructure constitutesamajorarea offocusundertheKuwait Construction, EngineeringandMaintenance 2.1.6: RailTransport Infrastructure – • • • Source: operational by2018. the GCCrailnetwork.Thisprojectistargetedtobecome industrial installationsaswelllinkingthecountrywith integrated railnetworkconnectingKuwait’skeyportand Bn. equipment firms,amongothers. rolling stockmanufacturers,signalingandcommunication engineering servicesproviders,constructioncontractors, for ahostofindustryplayersincludingintegrated Both theseprojectsareexpectedtoprovideopportunities The USD The valueoftheMetroprojectisestimatedatUSD
The projectistargetedtobeoperationalby2020. KAPP and Zawya 10 Bnrailwayprojectcomprisesofanew 7 opportunities for specialized, experienced firms. opportunities forspecialized,experienced for “greenarchitecture”theseprojectsandpresents on environmentalsustainabilityindicatestherequirement on anannualbasis.Kuwait’sincreasedfocusandawareness market ofUSD100-150Mnforoperationsandmaintenance of aroundUSD The plannedrailandmetroprojects,withacombinedvalue 2 -Keysectorsfor opportunities 17 Bnareexpectedtogenerateanannual
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