World Report

State power firm GECOL plans a substantial investment programme to meet rising demand

he acceleration of Libya’s economy after years of isolation is expected to result in a strong surge in the demand for electricity, with forecasts suggesting a rise of up to 10 percent annually.

The state power firm, the General Electricity Company of Libya (Gecol), has ambitious plans to match the demand with a substantial investment programme, worth around £6.7 billion, to be rolled out over the coming decade, that will effectively double installed generating capacity.

According to Gecol, peak demand will hit 4,000 megawatts (MW) in 2005, rising to 7,000MW after 10 years and then 8,000MW by 2020. Several major generation projects are already under way such as the West Mountain and Benghazi North power plants. Others, including the Tripoli West Extension project, and the Zawia and Gulf Steam initiatives, are in the advanced stages of planning.

There are equally ambitious plans on the distribution and transmission side. Supported by the government, Gecol is self-financing the improvements with some additional concessional lending support from the local banks. However, Gecol’s chairman Omran Ibrahim Abukraa (INTERVIEW) says that there is a clear need to attract foreign investment into these and other schemes. The cost of the capital works programme is simply too large for the state budget to contain. “The government cannot subsidise the demands from this sector on its own,” Mr Abukraa says.

Omran Ibrahim Abukraa
Chairman of Gecol
‘We are still trying to encourage British firms to take part’

Initial steps are being taken to open up the electricity market and pave the way for foreign investors. At present, Gecol is the sole agency responsible for generation, transmission and distribution. The utility is currently modernising its internal management systems ahead of future changes. Mr Abukraa says that things will unfold one step at a time. “We are preparing ourselves. Foreign investment in this sector will take its natural course after all these changes.”

Gecol is tackling projects alongside foreign technical partners primarily from Europe, Japan and South Korea. Mr Abukraa is very keen to see interest from British firms but pricing on tenders has been too high. “We are still trying to encourage British companies to take part in the construction process,” he says.

American firms have already been knocking on the door. “Some of the bigger companies are beginning to approach us and we are encouraging them to participate in the tendering process.”

SOURCE: GECOl

The main priority for Gecol is to build up its generating capacity and transmission network to handle the immediate bulge in demand over the next few years.

The restructuring of the energy sector will run in parallel. The new-look system, which will include stronger inter-connectors between Libya and neighbouring states, will be monitored by a network of regional control centres dotted throughout the country.

There are even long term plans to export electricity through the ambitious Mediterranean Ring initiative, which will create a regional power market among North African and Southern European states. The first stage is to install additional generating plants, Mr Abukraa explains. “If we do not succeed in constructing those plants in the next five years we could be facing a difficult problem.”