1.5 GW Planned Kuwait Solar Project Scrapped

The Government of Kuwait has officially called off the solar tender for its 1.5 GW Al-Dabdaba project that it launched in September 2018. The cabinet attributed the reason behind cancelling the project altogether to the COVID-19 pandemic, reported Reuters.

It quoted a statement by the cabinet that said the project has been cancelled ‘due to the spread of coronavirus and its impacts on the global oil and financial markets’. Kuwait National Petroleum Company (KNPC) will instead focus on its priorities to maintain its position in the global oil markets.

KNPC had tendered the 1.5 GW Al Dabdaba (also referred to as Al-Dibdibah) Solar Power Project to be developed in the Al-Shagaya Renewable Energy Park, increasing the original envisioned capacity of the plant from 1 GW to 1.5 GW. It was to be developed in 5 blocks of 300 MW each.

Kuwaiti asset management firm KAMCO Investment Company was hired as financial advisor for the KWD 500 million project for which 28 companies cleared the pre-qualification round. It was expected to come online in February 2021, but the project award was delayed ‘due to bureaucratic procedures’. Now, it has been scrapped for good, as per the Reuters report after having attracted the lowest bid at KWD 439 million ($1.4 billion).

With the pandemic forcing several countries of the world implement lockdown measures forcing people to operate from home with a resultant dramatic drop in economic activity, it brought down electricity demand and with it lowering prices for fossil fuel generated electricity. However, industry experts believe renewables are competitive enough to tide over this bump. Had the 1.5 GW project come online, it would have provided 15% of the Kuwaiti oil sector’s needs of electrical energy, added Reuters.