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Kuwait’s Public Private Partnerships Program
PARTNERSHIPS TECHNICAL BUREAU STATE OF KUWAIT
PTB‐President Adel Al‐Roumi www.ptb.gov.kw Kuwait – February 2013
Kuwait
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PTB Set-up and Priority Sectors
Partnerships Technical Bureau Set-up
The Partnerships Technical Bureau (PTB) was established in 2008, under Article 12 of Law No. 7/2008 and serves as the main body responsible for PPP projects implementation
PTB aims to utilize private sector skills and expertise to maximize value for money and service quality.
Increasing Kuwait’s Gross Domestic Product and diversifying its sources Encouraging private sector participation in development projects Improving public sector service quality Promoting human development and creating job opportunities for Kuwaiti
nationals Promoting scientific research and technological development
Objectives PTB’s Key Objectives
Key
Sec
tors
Invo
lved
In
Power
Education
Water/ Wastewater
Healthcare
Transportation
Sold Waste Management
Real Estate
Communication
Law 7 of 2008 and its associated by laws (256) set the legal framework for the introduction of PPPs in Kuwait
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Ranked List of Active PPP Projects
List of PPP Projects # Sector Project
1 Power Az-Zour North
2 Power AlKhairan
3 Power AlAbdaliyah (ISCC)
4 Water/ Wastewater Um Al Hayman WWTP
5 SWM Kabd Treatment SWTP
6 Education Kuwait Schools Development Program
8 Real Estate Failaka Island Development
9 Real Estate South Jahra Labor City
10 Real Estate Highway Rest Houses and Doha Chalet Centers
11 Real Estate Commercial, Educational, Cultural and Entertainment Center in Abdulla Alahmad Street
14 Healthcare Physical Medicine and Rehabilitation Hospital
16 Real Estate Expired Contracts of Properties Established on State-Owned Real Estate
High Priority Medium Priority Low Priority
Al Abdaliyah ISCC
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Power – Al Abdaliyah ISCC
This is the 1st Unsolicited Proposal that the Government approves to be a PPP
project to an open tender for participation from international and local investors
SPV will be established to undertake the development of this plant, ownership
of SPV will be distributed between the investor, the government and the
citizens through an IPO
The Project Company shall build and operate the ISCC Plant for a period of 25
years and shall enter into a Power Purchase Agreement “PPA” with the Ministry
of Electricity and Water "MEW"
During the investment period, the Project Company shall convert fuel, which is
supplied by MEW, into electricity and shall supply such electricity to MEW
The Project site will also be provided by the MEW and the leasing cost of such
site will be paid for by the Project Company
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Power – Al Abdaliyah ISCC
Al Abdaliyah ISCC
Description: The Project involves the establishment of a new Integrated Solar Combined Cycle in order to help the State of Kuwait manage the increasing
demand for electricity consumption. The Project includes the sale and purchase of associated power by the Ministry of Electricity and Water pursuant to an Energy Conversion Purchase Agreement
Project Overview
Build, Operate, and Transfer (BOT) PPP Model
High Priority Project Priority
Power: 280 MW of which 60 MW will be solar Capacity
Ministry of Electricity and Water (MEW) Public Entity
Appointing Transaction Advisor Project Status
Project Timeline Overview
Initiation
RFP Package Issued
Execution of Project
Contracts
Financial Close Early Power Project
Completion
Preferred Bidder
Selection
Project Initiation
RFQ TA Appointed
Review of Feasibility
Study
Phase 2
Phase 2 Construction Period
Phase 1
Key Milestones
Energy saving by utilizing solar thermal energy
Reduction of CO2 emission
Introduce efficiency
Provide investment opportunities for local banks & businesses
Boost Kuwait’s attractiveness for international lenders and Investors
Reduce the governments spending obligation
Transfer operation and construction risk to the private sector
Ensure timely completion of the construction
Improve reliability of power generation and water production capacity
Visibility of operation and maintenance costs
Allocate risks inline with international / regional best practices
Um Al Hayman WWTP
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Description: The Umm Al Hayman Wastewater Project consists of a number of treatment plant, related facilities, and transmission and distribution assets being constructed, operated, rehabilitated and/or decommissioned under a single concession agreement (the TSTCA).
Project Overview
Build, Operate and Transfer (BOT) Design, Build, Operate PPP Model
High Priority Project Priority
Initial capacity of 500,000 m3/day (“Stage 1”) and an expanded capacity of 700,000 m3/day (“Stage 2”)
Capacity
Ministry of Public Works Public Entity
RFP release Project Status
• The State of Kuwait, through the Partnerships Technical Bureau (“PTB”) in collaboration with the Ministry of Public Works (“MPW”), is seeking to procure through the public tendering process a new Waste Water Treatment Plant (“WWTP”) and associated wastewater and Treated Sewage Effluent (“TSE”) networks for the wastewater project in the Southern Area of Kuwait (Umm Al Hayman) (the “Project”). • The MPW will enter into a Transmission and Sewage Treatment Concession Agreement (“TSTCA”) with the Project Company (a special purpose company to undertake the Project), which includes a concession agreement for an investment term of 25 years for the WWTP and a design/construction term for the associated wastewater and TSE networks. • The new WWTP will be located in the southern sub region of the State of Kuwait. The Project service area comprises the areas of Riqqa and UAH. The Riqqa service area is located in the southern part of the Metropolitan Area and specifically in the governorates of Ahmadi and Mubarak Al Kabeer. The UAH service area contains the existing Umm Al Hayman Ali S. Al Salem town (at present serviced by the Existing UAH WWTP) and Az Zur settlement. Other major elements of this service area are the site designated for the new (under construction) town known as Uraifijan or Sabah Al-Ahmed.
Water/ Wastewater Management – Um Al Hayman WWTP
Um Al Hayman WWTP
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MPW • The Ministry of Public Works (MPW) is responsible for the execution of a wide range of state projects, including the construction of schools, clinics, hospitals, mosques and government buildings, and the development and maintenance of infrastructure projects like sanitary drainage, water networks, wastewater treatment, roads and highways. • Based on MPW’s analysis, the UAH Wastewater Project is being developed in response to an urgent requirement to expand the sewage treatment capacity (and retire obsolete treatment capacity) for the Southern Area of Kuwait and a requirement to expand the transmission network (both for wastewater and TSE distribution) to service the new UAH WWTP, future population growth in the region and future TSE demand. • MPW will be the sole intended off taker of wastewater services for the Project, signatory to the TSTCA and key long term counterparty for the Project Company. PTB • The Partnerships Technical Bureau (PTB) is the Government agency responsible for the implementation of the State of Kuwait’s PPP program and is in charge of the financial, commercial and technical evaluation of PPP projects. Established under Article 12 of the PPP Law, PTB is involved in all phases of a project, from inception to Financial Close. The UAH Project falls under PTB’s remit.
Water/ Wastewater Management – Um Al Hayman WWTP
Key Government Participants
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Water/ Wastewater Management – Um Al Hayman WWTP
Basic Contractual Structure
• The contractual relationship between MPW and the Project Company, including all obligations of DBO Company, will be governed by the TSTCA, thereby providing a single point of procurement between MPW and the private sector. • The BOT elements will be financed on a limited recourse basis with senior debt being serviced through receipt by the Project Company of plant payments on an availability basis for the term of the TSTCA. • For the DBO elements, MPW will reimburse the Project Company directly (who will in turn reimburse the DBO Company) for the cost of the DBO works on completion of contracted progress milestones and for the provision of O&M services, in accordance with the TSTCA. • The concession structure reflects that the BOT elements the DBO elements of the Project are paid for by MPW through payment mechanisms outlined in the TSTCA. The DBO payments will flow through Project Company to DBO Company in accordance with the terms of the TSTCA and DBO Agreement. • The Successful Bidder will establish the Project Company which may have foreign and local shareholding as appropriate. The Successful Bidder will be required to contribute 40% of the Equity required for the Project Company.
Kuwait – February 2013
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Water/ Wastewater Management – Um Al Hayman WWTP
Project Timetable
Request for Proposal ("RFP") • The RFP documents will include Instruction to Bidders, the Transmission and Sewage Treatment Concession Agreement, the Technical Specifications, and the associated Annexes and Bid Formsheets and other legal agreements. The RFP will contain all the necessary information of the Project for the bidders to submit competitive and compliant bids. • The full set of the RFP documents is now under finalization by PTB and MPW in collaboration with the Transaction Advisor. The target date to release the RFP is November 2012. • When the RFP is available for purchase, PTB and MPW will notify prequalified companies and consortia, and also companies listed on the Kuwait Stock Exchange, by way of a public advertisement.
Kuwait – February 2013
Thank You
14 www.ptb.gov.kw Kuwait – February 2013
PARTNERSHIPS TECHNICAL BUREAU