- The transaction is mandated by Kuwait’s Public-Private Partnership legal framework, which requires the State to offer 50% of the total ownership of PPP projects to Kuwaiti citizens through a public offering.
- The remaining 50% will continue to be owned by current shareholders (40% by a private consortium comprising ENGIE, Sumitomo Corporation, A.H. Al Sagar & Brothers, 5% by Kuwait Investment Authority, and 5% by the Public Institution for Social Security).
Kuwait City: The Kuwait Authority for Partnership Projects (KAPP) today announced October 1, 2019, as the date for the launch of the public offering of its 50% equity stake in Shamal AzZour Al-Oula KSC, the owner and operator of the AzZour North One Power and Water Plant. The company is the first to be established under Kuwait’s Public-Private Partnership (PPP) Law framework. The public subscription period will end on November 29, 2019.
The PPP laws constitute an integral part of an overarching governmental effort to include citizens in the ownership of megaprojects that are offered to private-sector institutional investors. In addition to providing attractive investment opportunities to citizens, PPP projects empower the private sector to take the lead in growing the national non-oil economy.
Shamal AzZour Al-Oula is Kuwait’s first privately-owned gas-fired combined cycle power and water desalination plant. The facility commenced commercial operations in November 2016 and currently supplies about 10% of Kuwait's installed power generation capacity and about 20% of the country’s installed water desalination capacity.
Power and water produced by the company are entirely supplied to the national power and water grid, owned and operated by the Kuwait Ministry of Electricity and Water (MEW) under a 40-year long-term Energy Conversion and Water Purchase Agreement (ECWPA). Shamal AzZour Al-Oula KSC is the first phase of Kuwait’s Independent Water and Power Project (IWPP), which is a part of MEW’s masterplan to increase the country’s capacity to meet electrical and water demand over the coming years.
Once the transaction concludes, and depending on the final level of demand, up to 50% of Shamal AzZour Al-Oula will be owned by Kuwaiti citizens. The remaining 50% will continue to be owned by current shareholders (40% by a private consortium comprising ENGIE, Sumitomo Corporation, A.H. Al Sagar & Brothers, 5% by Kuwait Investment Authority, and 5% by the Public Institution for Social Security).
Transaction Highlights:
- Stake: 50% of Shamal AzZour Al-Oula Power and Water Company KSC (Equivalent to 100% of KAPP’s stake in the company’s capital)
- Subscription Start Date: October 1, 2019
- Subscription End Date: November 29, 2019
- Eligibility: Kuwaiti nationals as of September 15, 2019
Project Highlights
- December 12, 2013: Signing ceremony with MEW, successfully concluding Kuwait’s first PPP RFP process. Construction commences.
- November 26, 2016: Construction completed, starts commercial operation (on schedule and on budget)
- September 11, 2017: NBK Capital appointed as lead advisor for the transfer of shares to the citizens.
- March 29, 2018: Completion Date.
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