Qatar Launches $718.4 Million Power, Water Plant Works

March 25, 2002

Qatar has launched the construction of a $718.4 million water and power plant, the Gulf Arab state's first private sector power and water project.

Crown Prince Sheikh Jassim bin Hamad al-Thani laid the foundation stone for Ras Laffan Power and Water Project, whose capacity will reach 750 megawatts and 40 million gallons a day of desalinated sea water in its first phase.

The plant will be commissioned in April 2003 and will become fully operational in May 2004. In the second phase, its capacity will rise to 1,500 megawatts and 80 million gallons per day.

U.S. firm AES Corp. owns 55 percent of the plant's shares, Qatar Electricity and Water Company (QEWC) holds 25 percent and the rest is equally owned by Qatar Petroleum, which will provide the plant with natural gas, and Kuwait-based Gulf Investment Corporation.

AES Corp. is the first foreign concern allowed by the oil-and gas-rich state to own a majority stake in a local project.

The fast track project is expected to help bridge the shortfall in the country's power generation capacity over the coming decade. Demand for power has been rising at about 9 percent a year.

Qatar's current power generation capacity stands at 1,818 megawatts, while peak demand last summer exceeded 1,980 megawatts, causing occasional power breakdowns.

The country is in the process of raising its capacity by 1,130 megawatts in the coming three years.

The Ras Laffan Power and Water Company will sell its output to Qatar General Electricity and Water Corporation under a 25-year power and water purchase agreement to be sold on to consumers.

Power and water supply is free for Qataris while expatriates and commercial establishments pay a subsidised 0.06 riyals ($0.02) per kilowatt hour (kwh) of electricity and 4.40 riyals per cubic meter of water.

Source: Reuters Limited

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