SYRIA - The Power Sector.

There has been rapid growth in power generation capacity in Syria in recent years. Installed capacity at present is about 6,000 MW, compared to a little over 4,000 MW in early 1998. This includes 900 MW in hydro-power plants which are only operating at about 200 MW. Peak demand in 2002 is expected to exceed 6,000 MW. This compares to a peak demand of 2,500 MW in 1991.

It was said in early 2000 that installed capacity by end-2001 or early 2002 should reach 7,244 MW and should include 1,605 MW of hydro-power. But most new projects have been delayed since 1999. Two projects supposed to be completed by now but yet to be contracted are:

Conversion of the 200 MW Tishreen power plant to combined cycle (CC), in a $120m project which now is scheduled to be completed in early 2004. This is to be financed by the Kuwait-based Arab Fund for Social and Economic Development (AFESD) and the Jeddah-based Islamic Development Bank (IDB). The bidders for this include a partnership of FiatAvio of Italy and Siemens of Germany, Alstom Power of France, Belleli of Italy, Deutsche Babcock of Germany, Iran Power Plant Projects Management Co. (Mapna), Saudi Binladin Group, and Transelektro of Hungary. The plant, built in the late 1980s by Soviet contractors, has two 100 MW gas turbines. The successful contractor will install a new 100 MW steam turbine and two water heat recovery boilers. The plant is run by state's Public Establishment of Electricity Generation & Transmission (PEEGT).

Conversion of the 375 MW Nasiriyeh power plant to CC. The plant has three 125 MW gas turbines supplied in 1997 by Fiat Avio. This, too, is owned by PEEGT. Now being tendered and to be financed by AFESD and IDB, this project involves the supply of an additional gas turbine and two heat exchanger/steam turbine units.

In early 2000 it was said the first private power venture in Syria called Syrian Power Investment Co. (SPIC) was to have a 600 MW plant by 2003. But so far no progress has been reported of this IPP project. Incorporated under Belgian law in 1994, SPIC is a joint venture between the Syrian-owned Sarakbi Group (headed by US-based Bourhan Sarakbi), and Tractebel of Belgium. The IPP is to be located at Bardeh, 150 km north of Damascus, and the plant is to be a build-operate-own-transfer (BOOT) venture. The government confirmed its support for the project in December 1997, but negotiations about the tariff have been dragging on between the PEEGT and SPIC. Delays were caused by a hardening of PEEGT's position in early 1999 following extremely low tariffs which Egypt secured from its three IPPs. A Sarakbi executive in mid-1999 was quoted as saying: "The eventual price will be higher than in Egypt because of the extra costs in Syria, particularly on the financing".

The rapid rise in generating capacity in recent years followed high demand growth which sparked off a period of power cuts in the early 1990s. This led President Assad to declare in September 1993 that every citizen had the right to a secure power supply. Until 1994, power cuts used to last several hours a day. The situation was so bad that supplies in war-ravaged Lebanon and Iraq were better than in Syria. After the government made the upgrading of this sector a priority, Electricite de France - under a 2-month EU-financed contract in 1994 - did a study to improve PEEGT's operations.

Financing for new power plants was done mainly by Japan's Overseas Economic Co-operation Fund (OECF), the Kuwait Fund for Arab Economic Development (KFAED), the Saudi Development Fund (SDF), AFESD, and IDB.

Capacity expansions on an emergency basis were carried out in the mid-1990s. Eight 125 MW gas turbines were added in various parts of the country during that period. Of these turbines, three units operating since mid-1998 generate 384?MW at Zaizoun, near Idlib in the north-west, fuelled by gas from Palmyra fields delivered through a 120 km pipeline. The plant was financed by AFESD.

Mitsubishi Heavy Industries (MHI), as part of a Japanese consortium including Mitsubishi Electric  and Fuji Electric, has had a big role in the Syrian power sector. In December 1995 a 600 MW CC plant built by MHI began operating at Jandar, south of Homs. Financed by a $410m Japanese OECF loan, it has four 100 MW gas turbines and two 100 MW steam turbines. MHI built a 1,000 MW steam plant at Aleppo, with a $530m loan from SDF, and the first three 200 MW units started up in early 2000 - the other two units were completed in 2001. MHI has also built for Syrian Petroleum Co. the 600?MW Al Zara gas-based power station near Homs, with a $440m OECF loan. Its first 200 MW unit began operating in late 1999. The final 200 MW unit start up in early 2001. The plant has a pressure reduction and metering system for the gas intake facility. MHI had implemented the expansion of the Banias power plant in 1986, under a $296m Japanese loan; and this now has a 680 MW capacity with a dual use system for fuel oil and gas. Enel of Italy has been involved in the upgrading of Banias.

In April 2001, Japanese and Syrian officials celebrated the rehabilitation of the Banias plant, which was financed by a Japanese grant of about $9m. The refit increased the plant's efficiency and reduced annual operational costs by up to $5m. It was part of a Japanese-Syrian agreement signed in 1999. With Tokyo having given Damascus almost $1 bn worth of project finance in Syria's power sector since 1989, MHI has done most of the work. Syria wants more aid from Japan for rehabilitation of other power plants.

KFAED in August 2001 allocated a $320m loan to be spent on Syria's gas, water and power projects over a four-year period. The projects include a power grid to connect Damascus, Hama and Aleppo, and a $60m conversion of one of the Banias power plant's fuel-oil fired unit to use natural gas.

Rehabilitation and conversion projects include work at the 630 MW Mhardeh power plant, on the Mediterranean north-west of Hama. Lahmeyer International of Germany has been the consultant. Apart from these, the PEEGT has the following gas-fired plants: a 450 MW station at Suwaidiyah, a 120 MW plant in Der Ez Zor, a 90 MW plant in Al Thayyem, and a 60 MW plant at Qattinah. The PEEGT has nine 100 MW hydro-power plants at the Euphrates Dam which, together, have been operating at 200 MW due to low water levels in Lake Assad and technical problems.

The governments of Jordan and Syria are finalising plans for the long-awaited Wihdeh dam project which will cost about $210m and should be awarded in mid-2002. The 600-metre long dam is to supply irrigation water for 47,000 donums of land in the Jordan Valley and to provide drinking water for Amman and the neighbouring town of Zarqa, as well as supply Syria with up to 18,000 MWh of electricity per annum. KFAED, AFESD, IDB and the Abu Dhabi Fund for Economic Development (ADFAED) will partly finance the project.

Another important development in this sector is the planned link-up of the Syrian power grid to those of Turkey, Iraq, Jordan Egypt, Libya, Tunisia, Algeria and Morocco, under an agreement signed in Damascus in August 1996, being financed by AFESD. The link to Jordan has entailed a 400 kV transmission line from Jandar to the Amman North substation done in early 2000 by KEC Int'l of India under a $45m contract signed in Nov. 1997. Jordan is already linked to Egypt's network, which means Syria's and Egypt's grids are connected. The link from Damascus to the Turkish border is being built by a consortium of Galkon of Turkey and SAG of Germany.

In late 2001, Swedpower Int'l of Sweden began work on a six-month study to look at the feasibility of establishing a control centre for the link up among the 10 countries. The study, being financed by AFESD, will assess whether one centre can serve all the 10 countries or if a control centre will have to built in each one. The control system is a prerequisite for trading to begin on the network that will link the ten countries.