$392 million-deal to rent power ships approved

Cabinet agrees deal to lease 270 MW Turkish power ships for three years

The Cabinet has approved a deal with a Turkish firm to lease two power-generating vessels and thereby avoid a power crisis expected with the suspension in the operation of the country's main power plants.
A deal was reached with Karadeniz Powership Company after it reduced its price by nine percent. “The contract will hopefully be signed this week, or by early next week,” said Raymond Ghajjar, an advisor at the Ministry of Energy and Water.

Ghajjar, who took part in drafting the contract, said the Turkish firm will rent out to the government two power ships, with a total capacity of 270 megawatts, for three years.

The project will cost a total of $392 million. According to Ghajjar, this sum covers all operations related to the project, including mobilization, site preparation, operation and maintenance, and tax payments. EDL will provide the fuel.

According to the agreement, the Turkish company will send the first ship in August this year. The second ship will be dispatched a few months later.

The Cabinet stipulated that the down payment on the deal would not exceed 22 percent of the total. “The Ministry of Finance has undertaken to secure the down payment,” said Ghajjar. He said the rest of the funds, as well as the down payment, will be taken out of the EDL’s budget.

The Turkish firm was competing with U.S. firm Waller Marine, which had submitted a similar offer. In the original bids, each of Karadeniz and Waller Marines offered to lease a vessel with capacity to produce180 MW for five years at $429 million and $427 million, respectively. Both offers excluded the price of the fuel.

In March, the cabinet agreed to rent power-generating barges in order to replace energy sourced from power plants in Jieh and Zouk, which will be closed for renovation.

The two power plants, which together provide more than half of the country’s output, are expected to be closed around October. The renovation is expected to take more than two years.

Reported by Hanadi Chami