Kuwait cancels 1.5GW Al-Dabdaba solar complex amidst oil crash

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Kuwait National Petroleum Company's Shuaiba oil refinery, due to benefit from the Al-Dabdaba complex. Image: KNPC.

Kuwait has cancelled a 1.5GW solar project meant to power the country’s state-owned petrol company citing the ongoing COVID-19 pandemic.

Having originally tendered for the project in September 2018, the 1.5GW complex was expected to start construction last year prior to commencing operations in early 2021.

But delays beset the project and Kuwait’s cabinet has now confirmed it will not proceed. In a statement issued via Kuwait’s news agency, the cabinet confirmed it had elected to cancel all decision on the project due to the onset of novel coronavirus pandemic and its impact on global oil and financial markets.

The cabinet reached the decision during a virtual cabinet meeting held yesterday following recommendations from Kuwait’s economic affairs committee, the statement read.

The ongoing pandemic has sent shockwaves through global oil and financial markets, with numerous reports of delays to finance deals and a collapsing oil price triggered by tumbling energy demand. The International Energy Agency warned in April of an “historic shock” for global energy markets, with oil demand the hardest hit, falling by 9% in 2020.

The 1.5GW Al-Dabdaba solar project was initially intended to be constructed in five blocks of up to 300MW, based in the Al-Shagaya Renewable Energy Park near Kuwait’s border with Saudi Arabia. It was to supply renewable power to the Kuwait National Petroleum Company under a 25-year agreement.

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