The Gulf Electricity Interconnection System Project, spearheaded by the Gulf Cooperation Council Interconnection Authority (GCCIA), is a pivotal initiative fostering regional cooperation. Its primary objective is to address the escalating electricity demand across Gulf Cooperation Council (GCC) states and the Republic of Iraq.

A cornerstone of this endeavor, the expansion of the Gulf electrical interconnection with Kuwait (Al-Wafrah to the World) is a paramount GCC-approved infrastructure project. It aims to optimize reserve requirements in each nation, provide mutual emergency support, capitalize on surplus electricity, and reduce production costs.

Economic Benefits

This project entails constructing a new interconnection station in Al-Wafra, equipped with cutting-edge technology to stabilize Kuwait’s electrical network. Connected to the GCCIA grid via four 400-kilovolt (kV) circuits, the station will significantly enhance the capacity, efficiency, and reliability of the GCCIA member states' electrical networks, ensuring uninterrupted power supply. Moreover, it will facilitate economic and commercial benefits from surplus electricity generation.

The project is expected to yield significant technical and economic benefits. It will increase the capacity, efficiency, and reliability of the electrical network for the member states of the GCCIA, ensuring the sustainability of electricity supply at all times. Additionally, the Gulf electrical systems will have the opportunity to economically and commercially benefit from the surplus available in production capacities.

Kuwait stands to gain immensely from this project, with its network capacity boosted by approximately 3,000 megawatts (MW), optimizing operational efficiency. Additionally, the GCCIA will be able to supply 500 MW of electricity to southern Iraq.

 

Project Scope and Components

The project involves constructing a 300-kilometer 400-kV double-circuit overhead transmission line connecting Saudi Arabia's Al-Fadhili converter station to Kuwait's Al-Wafrah station. It also includes converting an existing double-circuit line between Al-Fadhili and the Al-Zour of Kuwait into a new 25-kilometer 400-kV double-circuit line connecting Al-Fadhili and Al-Wafrah.

Furthermore, the project entails expanding the Al-Fadhili station with electrical circuit breakers to link it to Al-Wafrah, as well as extending overhead lines from Al-Wafrah to Sabah 3 and Sabah 4 stations to integrate with Kuwait's national electrical network.

Alignment with Sustainable Development Goals

This project contributes to several United Nations Sustainable Development Goals (SDGs), including:

 * Good Health and Well-being

 * Quality Education

 * Affordable and Clean Energy

 * Decent Work and Economic Growth

 * Industry, Innovation, and Infrastructure

 * Sustainable Cities and Communities

 * Partnerships for the Goals

 

Financial Overview

The project's estimated cost is approximately KWD 178.1 million (USD 570 million), including contingencies. The Kuwait Fund for Development will provide two KWD 35 million (USD 224 million) loans, constituting 40% of the total cost. These loans have a 12-year term with a 3-year grace period, repaid in 18 semi-annual installments at a 15.5% annual interest rate.

The financing agreement signed on March 24, 2022, marks a pioneering collaboration between the Kuwait Fund for Development and the GCCIA.

Kuwait Fund's Commitment to the Electricity Sector

The Kuwait Fund for Development has a strong history of supporting the electricity sector, recognizing its critical role in economic and social development. Previous contributions include a KWD 30 million loan for the Saudi Arabia-Egypt interconnection project.

With approximately KWD 1.6 billion (USD 5 billion) invested in the global electricity sector, representing 25% of its total contributions, the Kuwait Fund underscores its dedication to this vital area.