The Kuwait Fund for Arab Economic Development (KFAED) has revealed plans to extend a second loan for the Gulf Electricity Interconnection Expansion Project (GEIEP) with a second loan.

While specific loan conditions are yet to be finalised, this move follows KFAED’s March 2022 agreement in which they signed a $115 million loan deal with the Gulf Cooperation Council Interconnection Authority (GCCIA).

The purpose of the agreements is to reinforce the electrical interconnection infrastructure across the Gulf region and Iraq, said a statement by KFAED on Tuesday.

The GEIEP project, featuring a capacity of 500 megawatts (MW), includes the establishment of a central linking station at the Al-Wafrah facility in Kuwait.

It also involves the construction of dual overhead lines to connect with the Al-Fadhili station in Saudi Arabia, followed by the conversion of a double overhead line leading back to the Al-Zour area in Kuwait.

The Al-Wafrah station project is on track for completion by December 2024.

This initiative is expected to benefit Kuwait significantly, as it is poised to augment its electricity network by nearly 2,500 MW, making it the primary beneficiary.

The project also holds promise for improving the electricity network in southern Iraq.

Integral to this is the construction of overhead lines from the Al-Wafrah area to the Sabah Al-Ahmad (3) and Sabah Al-Ahmad (4) stations, thus enhancing connectivity with the Kuwaiti network.

Furthermore, a network of 400kV overhead lines will be extended to the Al-Faw station in southern Iraq to interconnect with the Iraqi grid. The project is expected to yield an economic return of approximately 14.4%, according to KFAED.