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Kuwait Fund for Arab Economic Development (KFAED) plans to offer a second loan to finance the $570 million Gulf Electricity Interconnection Expansion Project (GEIEP).
The loan conditions will be agreed later, the KFAED said in a statement on Tuesday.
In March 2022, the Kuwaiti fund signed a loan agreement worth $115 million with the Gulf Cooperation Council Interconnection Authority (GCCIA) to strengthen the electrical interconnection system in the Gulf region and Iraq.
The 500 megawatts (MW) GEIEP project consists of establishing a main linking station in the Al-Wafrah station in Kuwait, constructing double overhead lines to connect to the Al-Fadhili station in Saudi Arabia, and then converting a double overhead line back to the Al-Zour area in Kuwait.
The Al-Wafrah station project is expected to be completed by December 2024.
Kuwait will be the largest beneficiary of the project, which would increase its electricity network by nearly 2,500 MW. It will also benefit the electricity network in southern Iraq.
The project includes construction of overhead lines from the Al-Wafrah area to the Sabah Al-Ahmad (3) and Sabah Al-Ahmad (4) stations to connect with the Kuwaiti network, as well as a network of 400kV overhead lines to Al-Faw station in southern Iraq to connect with the Iraqi grid.
“The project is generally considered as another milestone in the plans of GCCIA, which aims to provide a flexible electrical interconnection network that guarantees energy security and economic benefits for all member states,” said Guillaume Jahan, CEO of Vinci Energies, which is the implementing company.
The project is expected to achieve an economic return of about 14.4 percent, the KFAED statement said.
(Writing by P Deol; Editing by Anoop Menon)
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