Powering up for progress: Qatar is creating a genuinely innovative power sector that blends public and private sector investment.

Author:Ford, Neil

ALMOST ALL GULF ECONOMIES are seeking to reform and liberalise their power sectors. Some have placed their faith in gas fired independent power producers (IPPs), while others have opted to make desalination plants a key element of their generation mix. Qatar, for instance, is relying almost entirely on independent water and power producers (IWPPs), fed by domestic gas reserves, to provide new generating capacity.

Until 2000, Qatar's entire power sector, through generation, transmission and distribution, was owned by the government. However, in May 2000, all assets were transferred to the new Qatar Electricity and Water Corporation (QEWC) and the Qatar General Electricity and Water Corporation (Kahramaa). While other governments in the same position have sought to sell their power companies outright to foreign firms or awarded long-term management contracts, Doha opted to create a genuinely Qatari private company in the form of the QEWC. The government continues to hold a 43% stake in the firm but the remaining equity is held by a wide variety of domestic investors with the government planning to further erode its own holding in the future.

Despite the growing role of other private investors in power generation, QEWC still plays the leading role in the sector and holds equity in several IWPPs. The 750MW Ras Laffan IWPP opened in November 2004 at the Ras Laffan gas and industrial complex. The $700m plant is owned by AES of the US (55%), QEWC (25%), Qatar Petroleum (QP) (10%) and Gulf Investment Corporation (GIC) (10%). GIC is jointly owned by the six member states of the Gulf Cooperation Council (GCC) and was set up to invest in infrastructural projects across the region. The plant is fed with water by a 60km pipeline with a huge three metre diameter and, despite the complexity of combined water and power schemes, Ras Laffan was completed very rapidly.

At the opening ceremony, Abdullah bin Hamad Al Attiyah, the minister of energy and industry, said: "The Ras Laffan Power and Water Plant has the distinction of being a fast-track project. It started generating power in March 2003, almost a year to the date of laying its foundation stone, and started producing water last May. It is considered part of the country's long-term plan to ensure a continuous supply of cost effective electricity and water." The plant will mainly supply the Ras Laffan industrial zone, although surplus production will be used to supply the rest of the country.

A second...

To continue reading