Kuwait Fund signs deal to develop Gulf Electricity Interconnection System

By Arya M Nair, Official Reporter
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Kuwait Fund_GCCIA partnership

Kuwait Fund for Development (KFAED) has signed a second loan agreement with the Gulf Cooperation Council Interconnection Authority (GCCIA) for $114 million to contribute to the financing of the Development of the Gulf Electricity Interconnection Grid and expanding it to the South of Iraq Electricity Network.

The signing ceremony of the second loan agreement took place at its headquarters in the presence of His Excellency the Minister of Foreign Affairs and Chairman of the Board of Directors of KFAED, Mr. Abdullah Ali Al-Yahya, Secretary-General of the Gulf Cooperation Council for the Arab States of the Gulf His Excellency Jasem Mohamed Al-Budaiwi, CEO of the GCCIA Engineer Ahmed Bin Ali Al-Ebrahim, and a number of senior officials.

The agreement was signed on behalf of the Fund by Minister Al-Yahya, while Engineer Al-Ibrahim signed on behalf of the Authority.

The project consists of the construction of a new interconnection station within the GCCIA’s electrical grid in the Al-Wafra area in the State of Kuwait on an area of approximately 62,000 square meters, and the extension of 400-kV double circuit overhead transmission lines for a length of approximately 255 kilometers to connect the new station to the Al-Fadili converter station in the Kingdom of Saudi Arabia.

It also involves the extension of 400 kV double circuit overhead transmission lines for a length of approximately 295 kilometers from Al-Wafra station to Al-Faw station affiliated to the Ministry of Electricity of Iraq in southern Iraq.

The project also includes the supply and installation of electrical circuit breakers, reactors, electrical systems, and measurement and control systems for the construction and expansion of converter stations in Al-Wafra, Al-Fadili, and Al-Faw.

The project also includes the addition of new electrical installations to strengthen the network connected to Al-Wafra station in Kuwait to enable it to increase an electrical capacity of approximately 3,000 megawatts. In addition, the project also strengthens the network in southern Iraq, which is connected to Al-Faw station, to enable it to increase its electrical capacity to not less than 500 megawatts.

Ahmed Bin Ali Al-Ebrahim_GCCIA partnership
Ahmed Bin Ali Al-Ebrahim

“There are several projects under study to expand the interconnection grid with other GCC-member states, expected to come into effect within the next few years. GCCIA is currently working to enhance the economic benefits of the electrical interconnection by utilizing additional transmission capacities. This will activate the joint Gulf electricity market, enabling the exchange and trade of electricity among Gulf countries and other nations as well. Such a move is projected to provide economic opportunities valued at over $20 billion over the next 15 years.”

Al-Budaiwi expressed the honor and pride of signing the second loan agreement with Kuwait Fund, reaffirming the continuation of joint Gulf action on all levels. This includes cooperation and coordination in the electrical interconnection field, in addition to the countless efforts exerted by all GCC member states to carry on with the Gulf integration process.

Al-Budaiwi also commended the Fund’s role in boosting development efforts on regional and international levels, noting that the Kuwait Fund which was established in 1961, was the first Arab fund to assist other nations. Additionally, its aid reached many of the world’s countries over the past years, becoming a great means to communicate with the international community during its most difficult times.

Meanwhile, Al-Ebrahim noted the two loan deals to enhance the electrical interconnection grids in Gulf states and southern Iraq mark the first-ever cooperation between KFAED and GCCIA in the electrical interconnection grid expansion phase, adding that there are currently three main projects to boost interconnection with the State of Kuwait, the United Arab of Emirates, and the Sultanate of Oman, in addition to the southern region of Iraq, which surpassed its total cost by over $1 billion.

Al-Ebrahim highlighted the importance of the ongoing cooperation between GCCIA and KFAED, noting the significance of the Fund’s contributions to financing infrastructure projects for GCC states, helping achieve sustainable development goals.

The Al-Wafra station is anticipated to be operational by the end of 2024, with the project implementation currently at approximately 80 percent. The entire project is expected to be completed by 2026.

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