Kuwait Fund Grants $570 Million Loan to Boost GCCIA’s Electricity Expansion Project
In a significant move aimed at bolstering regional connectivity, the Gulf Electricity Interconnection expansion project has secured a substantial $570 million loan from the Kuwait Fund for Arab Economic Development, as announced in an official statement.
This initiative stands as a crucial component of the Gulf Cooperation Council Interconnection Authority’s ongoing efforts to address the energy-related challenges faced by its member nations, along with Iraq.
The primary objective of the project is to deliver both technical and economic advantages by augmenting the capacity, efficiency, and reliability of the electrical networks within the GCC countries.
As a major beneficiary of this development, Kuwait is poised to receive an additional supporting capacity of 2,500 megawatts, which will significantly fortify the nation’s electricity grid.
Moreover, the project is set to have a profound impact on the electrical infrastructure in southern Iraq. This region will witness a substantial boost in electrical capacity, totaling 500 megawatts. This increase not only serves to meet a portion of the region’s energy demand but also enhances the overall performance and stability of its electrical network.
The scope of this ambitious undertaking encompasses the establishment of a pivotal linking station at Al-Wafrah in Kuwait, with a targeted completion date set for December 2024.
Furthermore, the project involves the construction of dual overhead transmission lines to establish a connection between the Al-Wafrah station in Kuwait and the Al-Fadhili station in Saudi Arabia. This connection is then extended through double overhead lines back to the Al-Zour area in Kuwait.
In addition to these measures, cables will be laid to connect the Al-Wafrah area to the Sabah Al-Ahmad 3 and Sabah Al-Ahmad 4 stations in Kuwait, ensuring their integration into the country’s electrical network.
The final phase of the project entails the extension of 400-kilovolt overhead lines to the Al-Faw station in southern Iraq. This linkage will connect the station to the national electrical grid and, subsequently, to the global network.
Projections for this ambitious endeavor anticipate a commendable economic return of 14.4 percent, underscoring its financial viability. Furthermore, the initiative aligns seamlessly with broader sustainability objectives, emphasizing its commitment to environmentally conscious practices.
It’s worth noting that in March 2022, the Kuwait Fund for Arab Economic Development sealed a loan agreement to provide 35 million Kuwaiti dinars (equivalent to $115 million) for the financing of this expansion project. According to an official statement, the fund has future plans to extend an additional loan to the project, with the specific terms and conditions subject to negotiation and agreement at a later date. This substantial investment is set to play a pivotal role in advancing energy infrastructure and connectivity across the region.
