LIBYA - The Electric Power Sector.

Libya's power generating capacity is to be more than doubled to 12,000 MW before 2010. Demand for peak load power is this country is growing at the rate of 7% per annum. Since 1999 planners have warned there could be a power shortage in the summer of 2001 due a major rise in consumption for air conditioning expected from early July.

A big increase in the use of air conditioners since April 1999 has been due mainly to the suspension of the UN sanctions and a rise in revenues thanks to high oil prices.

The General Electricity Corp. (Gecol), Libya's state-owned unit in charge of this sector, has in recent years implemented capacity expansions and built new plants as well as converted some old stations to use natural gas instead of fuel oil. The latest of the new projects was a 640 MW gas-fired plant at Azzawiya, 40 km west of Tripoli, consisting of four units contracted in 1998 and completed last year. New projects will include the following:

* A 600 MW gas-fired Western Mountain plant, for which the preferred bidder is Enelpower (the engineering and construction unit of the Italian power utility Enel). This will have four 150 MW gas turbine. The site for this, yet to be officially announced, is expected to be close to the route of the planned gas export pipeline from Libya's Western Desert to Italy. Enelpower has been competing for the project with BHEL of India and Alstom of France. Enelpower received a letter of intent for the project in late May and expects to conclude negotiations with Gecol before end-July.

* A 1,400 MW Gulf Steam plant, about 20 km outside the coastal city of Sirte, for which the bidders include Enelpower, Ansaldo Energia of Italy, Alstom, and BHEL. The plant is to have four 350 MW steam units. The contract for this is to be awarded before end-July and the project should be completed within 42 months. Together with this plant there will be a water desalination facility.

* A 300 MW second phase expansion and combined cycle conversion of the Benghazi North power plant. Ansaldo is the preferred bidder for this $300m project, having received a letter of intent for the turnkey contract from Gecol in 2000. The final award is expected shortly. The expansion will involve two 150 MW steam turbines, which will be the fifth and sixth units. The Kuwait-based Arab Fund for Economic and Social Development and the Jeddah-based Islamic Development Bank are providing a total of $125m to finance the project. The Benghazi North complex now consists of three gas-fired units each having a capacity of 150 MW. The fourth 150 MW gas turbine is being installed by Alstom. (The contract for the latter turbine was won by ABB Alstom Power, which was taken over by Alstom in 2000).

* A conversion of the existing power plant at Azzawiya to combined cycle. This will be done through the addition of gas turbines. Lahmeyer of Germany in 2000 submitted a feasibility study for this.

* A gas-fired plant at Misurata, for which Lahmeyer completed a feasibility study at the end of August 2000.

One reason for the planned expansion is that many existing facilities are poorly maintained; and the Qadhafi regime often prefers to build new plants than to renovate old ones. Another reason is that Libya intends to sell electricity to Egypt and to Tunisia. A link between the power systems of Egypt and Libya was made in 1998 as part of a plan to connect Egypt's electricity grid with that of North Africa. A link with Tunisia was completed recently.

The Mediterranean Electric Ring, an EU-financed project, will connect all the power network around the Mediterranean basin. This was officially launched on Feb. 8, 2001 in Nice. The project should be completed by 2005.

Gecol in December 1997 launched a programme to have 42 substations, 66-kV each, installed throughout the country with concentration on the Benghazi, Tripoli and Sebha areas. The programme is to be completed this year.

Transmission and substation projects recently completed include a 400-kV link between Khoms and the first phase of the Great Man-Made River (GMR) and a 66ykV line between Messla and Sarir. Two 400-kV substations have beeninstalled, together with a new transmission network.

(Apart from the power projects, the government has been spending heavily on water resources. Dong-Ah Construction of South Korea has had a contract worth about $3.575 bn to build Phase 1 of the $30 bn Great Man-Made River (GMR) project. The aim of this is to carry water from the underground wells of southern and central Libya to the northern coast for agricultural and other needs. The sources include a huge underground water reservoir in Kufra in the deep south. Phase 2, a 500-km pipeline to link the Jaghboub well field with Tobruk, is under construction. Phase 3, yet to be designed, will involve drilling and development of wellheads in Kufra and a 500-km pipeline linking them with the Phase 1 network. But Phase 1 now is only flowing at the rate of 300,000 CM/d, compared to an intended capacity of 2m CM/d. Qadhafi's goal is to make Libya "green" by creating 180,000 hectares of farmland and achieving self-sufficiency in food. The project, which started in 1985 and should be complete in this century, has been ridiculed by his critics as uncompetitive and impractical).