|
(Last updated: 15 Mar 2011)
Trends and opportunities
The market
The Government of Kuwait-owned plant will add much needed power to the grid, allowing Kuwait to boost electricity production to help meet growing demand.
A reliable supply of electricity is critical to avoid future power shortages and to support the continued economic and social development of Kuwait.
Kuwait has embarked on plans to develop its first-ever privately managed power and desalination plant. The independent water and power project (IWPP) will see a power and desalination complex built at a proposed Greenfield site in Az Zour North.
The IWPP complex is expected to have a guaranteed capacity of 1500MW of power and 100 million gallons per day of desalinated water. Under an offtake agreement, Kuwait's ministry of electricity and water will buy the plant's output for a term of up to 30 years, similar to other IWPP deals across in the region.
Market drivers
Increased government spending on infrastructure – Kuwait's National Assembly passed a US$108 billion package for infrastructure development in February 2010.
The development of Kuwait – Kuwait plans to spend about 16 billion dinars in the fiscal year starting April 1, 2010 one-third more than the current year as oil prices rise.
The emirate, which expects to spend 12.1 billion dinars in the current fiscal year, posted a budget surplus of 2.74 billion dinars last year as it benefited from higher oil sales. (Source: Marcopolis, ‘Strong recovery of Kuwait economy’).
Opportunities
Services opportunities
These include, but are not limited to specialist rail and roads consultancy, transport and logistics, including ports, water management, green building expertise, facility management, project management and construction contracting and specialist sub-contracting.
Engineering and architecture firms should note that the downturn has diminished the pipeline of construction projects coming on-stream and made conditions for the numerous firms very competitive. New entrants in design and engineering are likely to struggle in the current environment.
Product opportunities
These include, but are not limited to heavy machinery, a wide variety of building materials and products including sustainable solutions, water saving devices, systems for building automation, air-conditioning and security, cutting-edge solar and wind energy solutions and swimming pool equipment.
What makes Kuwait an attractive place to do business?
- It has a sound economy, a youthful population, a well-established and managed banking system, excellent infrastructure, and a sophisticated business community familiar with Western practices.
- Australia's profile in the Kuwait is high. There is increasing recognition of Australian companies and capabilities. Around 40 Australian companies have established themselves in the Kuwait.
- Australia's advanced engineering and building-services, innovative products, ‘can-do’ approach and ability to deliver are ideal for Kuwait’s huge infrastructure programs.
- The Kuwait Government is continuing to promote capital development projects in areas such as building and construction, power, desalination, manufacturing and industrial zones. These initiatives represent opportunities for Australian firms as they are significant in value and number.
Competitive environment
Kuwait is strategically located between India and Europe and not far from South East Asia. It has typically been a trading hub, so competitors from Europe and Asia are numerous. Australian companies comment that there is a general preference for cost effectiveness over quality.
|