GCC Grid Authority Plans to Invest $3.5bn in Expansions

The GCC Interconnection Authority (GCCIA) is planning to invest nearly $3.5 billion over the next 10 years to more than double its transmission capacity, according to a senior official.

The plan is prompted by increasing reliance on common grids in the region to ensure power system stability and minimize operational risks.

The investments over the next decade will expand the capacity of GCCIA’s regional power networks, its CEO Ahmed El-Ibrahim said.

The investment plan responds to the requirements of the next phase and will pave the way for the expansion of electricity trade operations between the Gulf states, providing broader opportunities for the public and private sectors to benefit from surplus production capacity.

Last week, GCCIA and Sohar International Bank signed a $500 million interim financing agreement to support the implementation of a direct electricity interconnection project linking the Authority’s grid with that of the Sultanate of Oman. The project includes a 400-kilovolt double-circuit transmission line linking the Al-Sila station, owned by the GCCIA in the United Arab Emirates, with the Ibri station, to be established by the Authority in Oman. The total length of the line will be 530 kilometers.

In August, it was reported that the Kuwait Fund provided $224 million in financing for expansion of the GCC grid linking Kuwait with Saudi Arabia and Iraq.

Contracts worth $260 million have been awarded for the Saudi interconnection while the link with Iraq is estimated to cost $250 million, according to GCCIA’s website.

In June, Abu Dhabi Fund for Development (ADFD) signed a $205mln financing agreement with the GCCIA to strengthen the interconnectivity between the UAE and GCC power grid. The project includes the construction of a 400kV double-circuit overhead transmission line extending 96km to connect the Al Silaa substation in the UAE with the Salwa substation in Saudi Arabia, and the expansion of three key substations in Gonan, Al Silaa, and Salwa, and the installation of upgraded 400kV switchgears, circuit breakers and reactors.

Ahmed Ali Al Ebrahim, CEO of the GCCIA had said then the interconnection initiatives with Kuwait, Oman, and Iraq together represent a total investment of over $1 billion.  He said a unified Gulf electricity market is expected to create opportunities exceeding $20 billion over the next 15 years.