Kuwait’s Electricity and Water Ministry is set to more than double power generating and desalination capacity by 2017 to cater to the growing demand, with billions to be invested over the medium term, said a report.

The new energy research report ‘Kuwait Power Report Q3 2014’ by Business Monitor International (BMI)  pointed out that the government had awarded a $2 billion contract last year for the construction of its first independent water and power contract, granting private companies stake in the country’s energy sector for the first time in an effort to encourage investment.

Kuwait’s first public-private partnership for the construction of the 1.5GW Al-Zour power plant and desalination plant will set a precedent for greater private sector engagement within its infrastructure and power sectors, it said.

The country, which relies almost entirely on conventional thermal sources for electricity generation, has suffered from power shortages in recent months.

With demand for power likely to continue rising rapidly in the years ahead, the government is keen to spur additional investment in the sector. However, Kuwait's business environment remains challenging for international investors, it said.

The conventional thermal sources will remain the dominant fuel for electricity generation in Kuwait over the coming years, it stated.

Following the Fukushima tragedy in Japan in 2011, Kuwait ordered the National Nuclear Energy Committee to be dissolved and officially abandoned its pursuit of nuclear power. The country, however, is aiming to reduce its domestic oil consumption in an effort to free up additional barrels for export, with many power projects that are planned or under construction set to use gas.

The report features BMI’s market assessment and independent forecasts covering electricity generation (coal, gas, oil, nuclear, hydro and non-hydro renewables), electricity consumption, trade, transmission and distribution losses and electricity generating capacity.

It also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies. - TradeArabia News Service